EXECUTION COPY
COMPETITIVE ADVANCE AND MULTI-CURRENCY
REVOLVING CREDIT FACILITY AGREEMENT dated as of
October 30, 1996, among CHOICE HOTELS HOLDINGS, INC.,
a Delaware corporation (the "Borrower"), the lenders
listed in Schedule 2.01 (the "Lenders"), NATIONSBANK,
N.A., as co-agent, and THE CHASE MANHATTAN BANK, a
New York banking corporation, as agent for the
Lenders (in such capacity, the "Agent").
The Borrower has requested the Lenders to extend credit to the
Borrower in order to enable it to borrow on a standby revolving credit basis on
and after the date hereof and at any time and from time to time prior to the
Maturity Date (as herein defined) a principal amount not in excess of
$100,000,000 at any time outstanding. The Borrower has requested that up to
$75,000,000 of such principal amount be available to the Borrower in Alternative
Currencies (as herein defined). The Borrower has also requested the Lenders to
provide a procedure pursuant to which the Borrower may invite the Lenders to bid
on an uncommitted basis on short-term borrowings by the Borrower. The Borrower
has requested the Issuing Bank (as herein defined) to issue letters of credit,
in an aggregate face amount at any time outstanding not in excess of
$25,000,000, to support payment obligations incurred in the ordinary course of
business by the Borrower and its Subsidiaries (as herein defined). The proceeds
of the borrowings hereunder shall be used for general corporate purposes of the
Borrower and its Subsidiaries, including working capital, capital expenditures,
acquisitions and equity investments. The Lenders are willing to extend such
credit to the Borrower and the Issuing Bank is willing to issue letters of
credit for the account of the Borrower on the terms and subject to the
conditions herein set forth. Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
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"ABR Loan" shall mean any Loan denominated in dollars bearing interest
at a rate determined by reference to the Alternate Base Rate in accordance with
the provisions of Article II.
"ABR Standby Loan" shall mean any Standby Loan denominated in dollars
bearing interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Adjusted CD Rate" shall mean, with respect to any CD Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the sum of (a) a rate per annum equal to the
product of (i) the Fixed CD Rate in effect for such Interest Period and (ii)
Statutory Reserves, plus (b) the Assessment Rate. For purposes hereof, the term
"Fixed CD Rate" shall mean the arithmetic average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the prevailing rates per annum bid at or
about 10:00 a.m., New York City time, to the Agent on the first Business Day of
the Interest Period applicable to such CD Borrowing by three New York City
negotiable certificate of deposit dealers of recognized national standing
selected by the Agent for the purchase at face value of negotiable certificates
of deposit of major United States money center banks in a principal amount
approximately equal to the Reference Bank's portion of such CD Borrowing and
with a maturity comparable to such Interest Period.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified. Following the Distribution, the Borrower and the Subsidiaries shall
not be deemed to be Affiliates of Manor Care or its subsidiaries merely by
virtue of such companies' having common shareholders or directors as a result of
the Distribution.
"Agent and Administrative Fees" shall have the meaning assigned to
such term in Section 2.06(b).
"Aggregate Principal Amount Outstanding" shall mean, at any time, the
sum of (i) the aggregate principal
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amount at such time of all outstanding Loans denominated in dollars and (ii) the
aggregate Equivalent Dollar Amount at such time of the principal amounts of all
outstanding Eurocurrency Loans.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as effective.
"Base CD Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from the New York City negotiable certificate of
deposit dealers of recognized national standing selected by it. "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from
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three Federal funds brokers of recognized national standing selected by it. If
for any reason the Agent shall have determined that it is unable to ascertain
the Base CD Rate or the Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clauses (b) or (c) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Three Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Three Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Alternative Currency" shall mean Sterling, French Francs, Deutsche
Marks and any other freely available currency (other than ECUs) that is freely
transferable and freely convertible into dollars and in which dealings in
deposits are carried on in the London interbank market, which shall be requested
by the Borrower and approved by the Lenders.
"Applicable Percentage" shall mean, with respect to any CD Loan or
Eurodollar Standby Loan or with respect to the Facility Fees, as the case may
be, the applicable percentage set forth in the table below under the caption
"Eurodollar Spread", "CD Spread" or "Facility Fee Percentage", as the case may
be, based upon the Consolidated Leverage Ratio as of the end of and for the most
recent period of four consecutive fiscal quarters for which financial statements
of the Borrower are required to have been delivered under Section 5.04(a) or
(b), whether or not
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financial statements in respect of any subsequent period
shall have been delivered:
============================================================================
Consolidated Facility Fee Euro- CD
Leverage Ratio Percentage dollar Spread
Spread
----------------------------------------------------------------------------
Category 1 Less than or
equal to 0.50 to
1.00 .100% .200% .325%
----------------------------------------------------------------------------
Category 2 Greater than
0.50 to 1.00,
but less than or
equal to 1.50 to
1.00 .125% .225% .350%
----------------------------------------------------------------------------
Category 3 Greater than
1.50 to 1.00,
but less than or
equal to 2.50 to
1.00 .175% .275% .400%
----------------------------------------------------------------------------
Category 4 Greater than
2.50 to 1.00,
but less than or
equal to 3.00 to
1.00 .200% .350% .475%
----------------------------------------------------------------------------
Category 5 Greater than
3.00 to 1.00 .250% .500% .625%
============================================================================
;provided that the Applicable Percentage for the period commencing on the date
hereof and ending on November 30, 1996, shall be determined by reference to
Category 4; provided further that at any time when financial statements required
to have been delivered under Section 5.04(a) or (b) have not been delivered, the
Applicable Percentage shall be determined by reference to Category 5.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) identified by the Agent (or, if
need be, reasonably estimated by the Agent) as the then current net annual
assessment rate that will be employed in determining amounts payable by the
Agent to the Federal Deposit Insurance Corporation (or any successor) for
insurance by
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such Corporation (or such successor) of time deposits made in dollars at the
Agent's domestic offices.
"Asset Sale" shall mean, with respect to the Borrower or any
Subsidiary, any sale, transfer or other disposition of any assets or other
properties (including individual business assets, patents, trademarks and other
intangibles) of the Borrower or such Subsidiary, including the sale, transfer or
disposition of any capital stock of or any merger or consolidation involving any
Subsidiary and any issuance or sale by any Subsidiary of shares of its capital
stock, other than (i) sales of inventory and used equipment in the ordinary
course of business of the person (whether the Borrower or a Subsidiary) owning
and selling such inventory or used equipment; (ii) sales, transfers and other
dispositions of any tangible assets by the Borrower or any Subsidiary if the
Borrower or such Subsidiary enters into an agreement to replace such assets with
a comparable asset as soon as practicable (and in no event later than three
months) after the disposition and, pending such replacement, diligently pursues
the replacement thereof, and the fair market value of the replacement asset is
substantially equivalent to or exceeds that of the asset so disposed of; (iii)
sales, transfers and other dispositions of any assets to the Borrower or any
Subsidiary; (iv) Sale and Lease-Back Transactions; (v) sales by the Borrower or
Subsidiaries of assets acquired from persons other than the Borrower or other
Subsidiaries, which sales occur not more than 12 months after the respective
dates on which such assets were acquired and (vii) the Distribution and the
transactions related thereto set forth in the Form 10.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Agent, in the form
of Exhibit C.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders (or, in the case of a Competitive Borrowing, by the Lender or Lenders
whose Competitive Bids have been accepted pursuant to Section 2.03) on a single
date and as to which a single Interest Period is in effect.
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"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.04.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that (i) when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market and (ii) when used in connection with a Eurocurrency
Loan, "Business Day" shall also exclude any day on which commercial banks are
not open for foreign exchange business in London or, if such reference relates
to the date on which any amount is to be paid or made available in an
Alternative Currency, in the principal financial center in the country of such
Alternative Currency.
"Capital Lease Obligations" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
applied on a consistent basis and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount thereof
at such time determined in accordance with GAAP applied on a consistent basis.
"CD Borrowing" shall mean a Borrowing comprised of CD Loans.
"CD Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Adjusted CD Rate in accordance with the provisions of Article
II.
"CD Standby Borrowing" shall mean a Borrowing composed of CD Standby
Loans.
"CD Standby Loan" shall mean any Standby Loan bearing interest at a
rate determined by reference to the Adjusted CD Rate in accordance with the
provisions of Article II.
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in
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effect on the date hereof) other than Xxxxxxx Xxxxxx and his family shall own
directly or indirectly, beneficially or of record, shares representing more than
15% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower, except that such a person or group
may own directly or indirectly, beneficially or of record, shares representing
not more than 20% of the aggregate voting power represented by the issued and
outstanding capital stock of the Borrower if such person or group reports and
continues to report such ownership on Schedule 13G (filed pursuant to Rule
13d-1(b), Rule 13d- 1(c), or, in the case of amendments, Rule 13d-2(b), of the
Securities and Exchange Commission as in effect on the date hereof); (b) a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower shall at any time have been occupied by persons who were neither (i)
nominated by the management of the Borrower or by the Nominating Committee of
the Borrower's board of directors in connection with an annual meeting of the
stockholders of the Borrower, nor (ii) appointed by directors so nominated; or
(c) any person or group other than Xxxxxxx Xxxxxx and his family shall otherwise
directly or indirectly Control the Borrower. Notwithstanding the foregoing, if a
trust or foundation or other entity established by Xxxxxxx Xxxxxx or his family
holds shares representing in excess of 15% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower
and Xxxxxxx Xxxxxx or his family Controls such trust or foundation or such other
entity and the vote of such shares held by such trust or foundation or such
other entity and Xxxxxxx Xxxxxx and his family remain in Control of the
Borrower, there shall be no Change in Control for purposes of this Agreement;
provided, however, that any transfer of such shares by Xxxxxxx Xxxxxx, such
trust or such foundation or such other entity shall stand on its own merits for
purposes of this Agreement.
"Choice Hotels Franchising" shall mean Choice Hotels International,
Inc., a Delaware corporation, to be renamed Choice Hotels Franchising, Inc.
following the Distribution.
"Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment
of such Lender hereunder as set forth in Schedule 2.01, as such Lender's
Commitment may be
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permanently terminated or reduced from time to time pursuant to Section 2.11.
The Commitments shall automatically and permanently terminate on the Maturity
Date.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification made
by the Borrower pursuant to Section 2.03(d) in the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Lender pursuant to Section 2.03(b), (i) in the case of a Eurodollar Competitive
Loan, the Competitive Margin, and (ii) in the case of a Fixed Rate Loan, the
fixed rate of interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to
Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by the Borrower
under the bidding procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan from a Lender to the Borrower
pursuant to the bidding procedure described in Section 2.03. Each Competitive
Loan shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"Competitive Margin" shall mean, as to any Eurodollar Competitive
Loan, the margin (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) to be added to or subtracted from
the LIBO Rate in order to determine the interest rate applicable to such Loan,
as specified in the Competitive Bid relating to such Loan.
"Consolidated EBITDA" shall mean, for any period, without duplication,
the sum for such period of (a) Consolidated Net Income, (b) depreciation and
amortization expense, (c) Consolidated Interest Expense, (d) provisions for
income tax expense, (e) restructuring charges incurred in connection with the
Distribution and (f) non-cash charges related to the impairment of assets
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(pursuant to FAS 121), all as determined in accordance with
GAAP consistently applied.
"Consolidated Funded Indebtedness" means, as of any date of
determination, all obligations accounted for as indebtedness on a consolidated
balance sheet of the Borrower on such date, in accordance with GAAP consistently
applied, whether such obligations are classified as long-term or short-term.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, gross
total expenses of the Borrower and its consolidated Subsidiaries accounted for
as interest expense (including capitalized interest determined in accordance
with GAAP consistently applied) for such period, including (i) the portion of
rental payments under Capital Lease Obligations deemed to represent interest in
accordance with GAAP consistently applied, (ii) the amortization of debt
discounts, (iii) the amortization of all fees (including fees with respect to
interest rate protection agreements) payable in connection with the incurrence
of Indebtedness to the extent included in interest expense, all as determined on
a consolidated basis in accordance with GAAP consistently applied. For purposes
of the foregoing, gross interest expense shall be determined after giving effect
to any net payments made or received with respect to interest rate protection
agreements entered in to as a hedge against interest rate exposure.
"Consolidated Leverage Ratio" shall mean the ratio of Consolidated
Funded Indebtedness to Consolidated EBITDA. In the event the Borrower shall
complete, directly or through a Subsidiary, an acquisition or divestiture of any
Person or business unit during any period, the Consolidated Leverage Ratio as of
the end of and for such period shall thereafter be determined on a pro forma
basis as if such acquisition or divestiture had been completed on the first day
of such period.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Borrower and its consolidated Subsidiaries for such period, as
determined on
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a consolidated basis in accordance with GAAP consistently
applied.
"Consolidated Net Worth" shall mean, as at any date of determination,
the consolidated stockholders' equity of the Borrower and its consolidated
Subsidiaries, as determined on a consolidated basis in accordance with GAAP
consistently applied.
"Consolidated Total Assets" shall mean, as at any date of
determination, the total assets of the Borrower and its consolidated
Subsidiaries at such time, as determined on a consolidated basis in accordance
with GAAP consistently applied.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto; provided, however, the existence of a management contract by the
Borrower or one of its Affiliates to manage another entity shall not be deemed
to be Control.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"Denomination Date" shall mean, in relation to any Eurocurrency
Borrowing, the date that is three Business Days before the date of such
Borrowing.
"Deutsche Marks" shall mean the lawful money of the Federal Republic
of Germany.
"Distribution" shall mean the distribution by Manor Care to its
shareholders of all the capital stock of the Borrower in the manner, on the
terms and with the results set forth in the Form 10.
"Distribution Agreement" shall mean the Distribution Agreement dated
as of [ ], 1996, by and between Manor Care and the Borrower.
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"dollars" or "$" shall mean lawful money of the United States of
America.
"Effective Date" shall mean the date on which this Agreement becomes
effective in accordance with Section 4.02.
"Equivalent Dollar Amount" shall mean, with respect to an amount of
any Alternative Currency on any date, the amount of dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate on such date.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"Eurocurrency Borrowing" shall mean a Borrowing comprised of
Eurocurrency Loans.
"Eurocurrency Loan" shall mean any Loan denominated in an Alternative
Currency and bearing interest at a rate determined by reference to the LIBO Rate
in accordance with the provisions of Article II.
"Eurocurrency Sublimit" shall mean $75,000,000.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
denominated in dollars and bearing interest at a rate determined by reference to
the LIBO Rate in accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or
Eurodollar Standby Loan.
"Eurodollar Standby Borrowing" shall mean a Borrowing comprised of
Eurodollar Standby Loans.
"Eurodollar Standby Loan" shall mean any Standby Loan denominated in
dollars and bearing interest at a rate
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determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Facility Fee" shall have the meaning assigned to such term in Section
2.06(a).
"Fees" shall mean the Facility Fee and the Agent and Administrative
Fees, the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer of the Borrower" of any corporation shall mean the
chief financial officer, principal accounting officer, Treasurer or Controller
of such corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed Rate
Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest at
a fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"Form 10" shall mean the registration statement on Form 10 under the
Securities Exchange Act of 1934 of the Borrower filed with the Securities and
Exchange Commission on July 11, 1996, as amended and distributed to the Lenders
prior to the date hereof.
"French Francs" shall mean the lawful money of the Republic of France.
"GAAP" shall mean generally accepted accounting principles.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including
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any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided, however, that
the term Guarantee shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Hotel Properties" shall mean the properties set forth on Schedule
1.01, including fixtures and personalty associated therewith.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services, (f)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements and (j) all obligations of such person as an account
party in respect of letters of credit (other than (x) documentary letters of
credit (including commercial and trade letters of credit) issued to secure
payment obligations in respect of goods and services in the ordinary course of
business and (y) letters of credit and surety bonds with respect to obligations
of such person that are fully accounted for as liabilities in the financial
records of such person) and bankers' acceptances. The
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Indebtedness of any person shall include the Indebtedness of any partnership in
which such person is a general partner.
"Interest Payment Date" shall mean, with respect to any Loan, the last
day of the Interest Period applicable thereto and, in the case of a Eurocurrency
Loan or Eurodollar Loan with an Interest Period of more than three months'
duration or a Fixed Rate Loan or a CD Loan with an Interest Period of more than
90 days' duration, each day that would have been an Interest Payment Date for
such Loan had successive Interest Periods of three months' duration or 90 days'
duration, as the case may be, been applicable to such Loan and, in addition, the
date of any refinancing or conversion of such Loan with or to a Loan of a
different Type.
"Interest Period" shall mean (a) as to any Eurocurrency Borrowing or
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter, as the applicable Borrower may elect, (b) as to any CD
Borrowing, a period of 30, 60, 90 or 180 days' duration, as the Borrower may
elect, commencing on the date of such Borrowing, (c) as to any ABR Borrowing,
the period commencing on the date of such Borrowing and ending on the date 90
days thereafter or, if earlier, on the Maturity Date or the date of prepayment
of such Borrowing and (d) as to any Fixed Rate Borrowing, the period commencing
on the date of such Borrowing and ending on the date specified in the
Competitive Bids in which the offer to make the Fixed Rate Loans comprising such
Borrowing were extended, which shall not be earlier than seven days after the
date of such Borrowing or later than 360 days after the date of such Borrowing;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurocurrency Loans and Eurodollar Loans
only, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"Interest Rate Determination Date" shall mean, with respect to a
Eurocurrency Borrowing or Eurodollar
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Borrowing, the date which is two Business Days prior to the commencement of any
Interest Period for such Borrowing.
"Issuing Bank" shall mean, as the context may require, (a) The Chase
Manhattan Bank, or (b) any other Lender that may become an Issuing Bank pursuant
to Section 2.20(i), with respect to Letters of Credit issued by such Lender.
"Issuing Bank Agreement" shall mean an agreement in substantially the
form of Exhibit E.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.06(c).
"L/C Commitment" shall mean, with respect to any Issuing Bank, the
commitment of such Issuing Bank to issue Letters of Credit pursuant to Section
2.20.
"L/C Disbursement" shall mean a payment or disbursement made by an
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Lender at any time shall mean
its Pro Rata Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term
in Section 2.06(c)(i).
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.20, as permitted hereby.
"LIBO Rate" shall mean, (a) with respect to any Eurocurrency Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the rate at which deposits in the
currency in which such Loan is denominated approximately equal in principal
amount to the Reference Bank's portion of such Eurocurrency Borrowing and for a
maturity comparable to such Interest Period are offered to the principal London
office of the Agent, in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, on the relevant Interest Rate
Determination Date, and
17
(b) with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the rate at which dollar deposits approximately equal in principal
amount to (i) in the case of a Standby Borrowing, the Reference Bank's portion
of such Standby Borrowing and (ii) in the case of a Competitive Borrowing, a
principal amount that would have been the Reference Bank's portion of such
Competitive Borrowing had such Competitive Borrowing been a Standby Borrowing,
and for a maturity comparable to such Interest Period are offered to the
principal London office of the Agent, in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, on the
applicable Interest Rate Determination Date.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party (excluding rights of first refusal) with respect to such securities.
"Loan" shall mean a Competitive Loan or a Standby Loan, whether made
as a Eurocurrency Loan, a Eurodollar Loan, a CD Loan, an ABR Loan or a Fixed
Rate Loan, as permitted hereby.
"Loan Documents" shall mean this Agreement, the Letters of Credit,
each Issuing Bank Agreement and, if requested by a Lender pursuant to Section
2.07(e), each Note.
"Manor Care" shall mean Manor Care, Inc., a Delaware corporation.
"Manor Care Note" shall mean (a) Indebtedness of the Borrower to MNR
Finance Corp., a subsidiary of Manor Care, in an aggregate principal amount not
in excess of $225,722,500 having a maturity no earlier than the Maturity Date,
bearing interest at a rate equal to 9% per annum and having no scheduled
principal or redemption payments, except as expressly contemplated hereby (the
"Note"), and (b) any Indebtedness that renews, extends, refinances or replaces
the Note; provided, however, that the Indebtedness that extends, renews,
refinances or replaces the Note has (i) a
18
maturity and schedule of principal or redemption payments no earlier than that
of the Note and (ii) an aggregate principal amount that is equal to or less than
the aggregate principal amount then outstanding (plus fees and expenses,
including any premium and defeasance costs) of the Note.
"Margin Stock" shall have the meaning given such term under Regulation
U.
"Material Adverse Effect" shall mean a materially adverse effect on
the business, assets, property or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole.
"Maturity Date" shall mean the third anniversary of the date hereof.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Non-Recourse Hotel Indebtedness" shall mean Indebtedness, incurred
solely in respect of a Hotel Property, (i) as to which neither the Borrower nor
any Subsidiary (x) provides credit support (including any undertaking, agreement
or instrument which would constitute Indebtedness) or has given or made other
assurances regarding repayment, (y) is directly or indirectly personally liable
or (z) constitutes the lender and (ii) the obligees of which will have recourse
solely against the assets comprising such Hotel Property for repayment of the
principal of and interest on such Indebtedness and any fees, indemnities,
expense reimbursements or other amounts of whatever nature accrued or payable in
connection with such Indebtedness.
"Obligations" shall mean (a) the Borrower's obligations in respect of
the due and punctual payment of principal of and interest on the Loans and
reimbursement of the Letters of Credit, in each case when and as due whether
19
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (b) all Fees, expenses, indemnities, reimbursements and other
obligations, monetary or otherwise, of the Borrower under this Agreement or any
other Loan Document and (c) all obligations, monetary or otherwise, of each
Subsidiary under each Loan Document to which it is a party.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America);
(b) investments in commercial paper having credit
ratings of at least A-2 from S&P and P-2 from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital and
surplus and undivided profits of not less than $200,000,000;
(d) investments in the ordinary course of business in
customary repurchase agreements with respect to freely marketable,
short-term securities of the type customarily subject to repurchase
agreements; and
(e) other readily marketable debt and equity securities traded
on national securities exchanges or on other nationally recognized
markets, including over-the-counter markets.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
20
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code which
is maintained for employees of the Borrower or any ERISA Affiliate.
"Proceeds" shall mean, with respect to any Asset Sale, (a) the gross
amount of consideration or other amounts payable to or receivable by the
Borrower or a Subsidiary in respect of such Asset Sale, less (b) the amount, if
any, of all estimated taxes payable with respect to such Asset Sale whether or
not payable during the taxable year in which such Asset Sale shall have
occurred, and less (c) reasonable and customary fees, commissions, costs and
other expenses (other than those payable to the Borrower or a Subsidiary or
Affiliate of the Borrower or to Manor Care or a subsidiary or affiliate of Manor
Care) which are incurred in connection with such Asset Sale and are payable by
the seller or the transferor of the assets or property to which such Asset Sale
relates, but only to the extent not already deducted in arriving at the amount
referred to in clause (a) above. For purposes of determining Proceeds, the value
of all noncash consideration payable or receivable by the Borrower or any
Subsidiary, as the case may be, shall be the fair market value of such noncash
consideration as determined in good faith by the Borrower and the Borrower shall
provide to the Agent a certificate of a Financial Officer of the Borrower with
respect to the fair market value of such consideration, in form and substance
reasonably satisfactory to the Agent.
"Pro Rata Percentage" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment. In
the event the Commitments shall have expired or been terminated, the Pro Rata
Percentages shall be determined on the basis of the Commitments most recently in
effect (giving effect to any assignments under Section 9.04).
"Quality Hotels" shall mean Quality Hotels Europe, Inc., a Subsidiary.
"Reference Bank" shall mean the Agent or, in the case where the
Agent's Commitment is not the largest of the Lenders' Commitments, the Lender
possessing the largest Commitment.
"Register" shall have the meaning given such term in Section 9.04(d).
21
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Lenders" shall mean, at any time, Lenders having Commitments
representing at least a majority of the Total Commitment or, if the Commitments
have been terminated, Lenders holding Loans and L/C Exposures representing at
least a majority of the sum of the aggregate amount of L/C Exposures and
aggregate principal amount of the Loans then outstanding.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding Standby
Loans of such Lender denominated in dollars, plus the Equivalent Dollar Amount
at such time of the aggregate principal amount at such time of all outstanding
Standby Loans of such Lender that are Alternative Currency Loans, plus the
aggregate amount at such time of such Lender's L/C Exposure.
22
"Sale and Lease-Back Transaction" shall mean any arrangement, directly
or indirectly, with any person whereby such person shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.
"Significant Subsidiary" shall mean at any time (a) Choice Hotels
Franchising, (b) any Subsidiary of the Borrower with revenues during the fiscal
year of the Borrower most recently ended greater than or equal to 5% of the
total revenues of the Borrower and its Subsidiaries during such year, computed
and consolidated in accordance with GAAP consistently applied ("Consolidated
Revenues"), (c) any Subsidiary of the Borrower with assets as of the last day of
the Borrower's most recently ended fiscal year greater than or equal to 5% of
the total assets of the Borrower and its Subsidiaries at such date, computed and
consolidated in accordance with GAAP consistently applied ("Consolidated
Assets"), (d) any Subsidiary with stockholder's equity as of the last day of the
Borrower's most recently ended fiscal year greater than or equal to 5% of the
stockholder's equity of the Borrower and the Subsidiaries at such date, computed
and consolidated in accordance with GAAP consistently applied ("Net
Stockholders' Equity"), (e) any Subsidiary designated in writing by the Borrower
as a Significant Subsidiary, (f) any Subsidiary created or acquired by the
Borrower after the date hereof that falls within or that comes to meet one of
clauses (a) through (e) or (g) any Subsidiary in existence on the date hereof
which comes to meet one of clauses (a) through (e) after the date hereof;
provided, however, that if at any time (x) the aggregate revenues of all
Subsidiaries that are Significant Subsidiaries during any fiscal year of the
Borrower shall not equal or exceed 90% of Consolidated Revenues for such fiscal
year, (y) the aggregate assets of all Subsidiaries that are Significant
Subsidiaries as of the last day of any fiscal year of the Borrower shall not
equal or exceed 90% of Consolidated Assets at such date, or (z) the aggregate
stockholders' equity of all Subsidiaries that are Significant Subsidiaries as of
the last day of any fiscal year of the Borrower shall not equal or exceed 90% of
Net Stockholders' Equity at such date, then the term Significant Subsidiary
shall be deemed to include such Subsidiaries (as determined pursuant to the next
following sentence) of the Borrower as may be required
23
so that none of clauses (x), (y) and (z) above shall continue to be true. For
purposes of the proviso to the next preceding sentence, the Subsidiaries which
shall be deemed to be Significant Subsidiaries shall be determined based on the
percentage that the assets of each such Subsidiary are of Consolidated Assets,
with the Subsidiary with the highest such percentage being selected first, and
each other Subsidiary required to satisfy the requirements set forth in such
proviso being selected in descending order of such percentage.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc.
"SPC" shall mean a special purpose corporation formed by the Borrower
as a wholly owned Subsidiary and possessing only Hotel Properties as assets.
"Spot Exchange Rate" shall mean, on any day, with respect to any
Alternative Currency, the spot rate at which dollars are offered on such day by
The Chase Manhattan Bank in London for such Alternative Currency at
approximately 11:00 A.M. (London time).
"Standby Borrowing" shall mean a borrowing consisting of simultaneous
Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to Section 2.04. Each Standby Loan shall be a Eurocurrency
Loan, a Eurodollar Standby Loan, a CD Loan or an ABR Loan.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which the Agent is
subject for new negotiable nonpersonal time deposits in dollars of over $100,000
with maturities approximately equal to the applicable Interest Period. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
24
"Sterling" or "(pound)" shall mean the lawful money of the United
Kingdom.
"Subordinated Indebtedness" shall mean Indebtedness of the Borrower
that is subordinated in right of payment to any of the Obligations.
"subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Total Commitment" shall mean at any time the aggregate amount of the
Lenders' Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined and the currency in which such Loan or the Loans
comprising such Borrowing are denominated. For purposes hereof, "Rate" shall
include the LIBO Rate, the Adjusted CD Rate, the Alternate Base Rate and the
Fixed Rate, and "currency" shall include Dollars, French Francs, Deutsche Marks,
Sterling and any other Alternative Currency permitted hereunder.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may
25
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP consistently applied, as in effect from time to time;
provided, however, that, for purposes of determining compliance with any
covenant set forth in Article VI, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in preparing the Borrower's audited
financial statements referred to in Section 3.05.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Standby Loans (including Eurocurrency
Loans) to the Borrower, at any time and from time to time on and after the date
hereof and until the earlier of the Maturity Date and the termination of the
Commitment of such Lender, in an aggregate principal amount at any time
outstanding that will not result in such Lender's Revolving Credit Exposure
exceeding such Lender's Commitment minus the amount by which the Competitive
Loans outstanding at such time shall be deemed to have used such Commitment
pursuant to Section 2.16, subject, however, to the conditions that (a) at no
time shall any Loan be made if, immediately after giving effect thereto and to
the application of the proceeds thereof, the Aggregate Principal Amount
Outstanding would exceed the Total Commitment minus the L/C Exposure, (b) at no
time shall any Loan be made if, immediately after giving effect thereto and to
the application of the proceeds thereof, the aggregate Equivalent Dollar Amount
of all outstanding Eurocurrency Loans would exceed the Eurocurrency Sublimit and
(c) at all times the outstanding aggregate principal amount of all Standby Loans
made by each Lender shall equal the product of (i) the percentage which its
Commitment represents of the Total Commitment times (ii) the outstanding
aggregate principal amount of all Standby Loans made pursuant to
26
Section 2.04. Each Lender's Commitment is set forth opposite its respective name
in Schedule 2.01. Such Commitments may be terminated or reduced from time to
time pursuant to Section 2.11. Within the foregoing limits, the Borrower may
borrow, pay or prepay and reborrow hereunder, on and after the Effective Date
and prior to the Maturity Date, subject to the terms, conditions and limitations
set forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their Commitments; provided, however, that the failure of any Lender to make any
Standby Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.03. Except for Loans deemed made
pursuant to Section 2.02(e), the Standby Loans or Competitive Loans comprising
any Borrowing shall be (i) in the case of Competitive Loans, in an aggregate
principal amount which is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) in the case of Standby Loans, in an aggregate principal
amount which is an integral multiple of $1,000,000 and not less than $5,000,000
(or an aggregate principal amount equal to the remaining balance of the
available Commitments); provided, however, that if the Equivalent Dollar Amount
of any Eurocurrency Loan at the end of the Interest Period applicable thereto
does not exceed by more than 5%, and is not less than 95% of, the Equivalent
Dollar Amount of such Loan on the relevant Denomination Date, then the
applicable Borrower may (notwithstanding clauses (i) and (ii) above) refinance
such Loan with a new Loan denominated in the same Alternative Currency and with
the same principal amount (in such Alternative Currency) at the end of such
Interest Period, notwithstanding that the Equivalent Dollar Amount of the new
Loan is not an integral multiple of $1,000,000. For purposes of this Section,
any Eurocurrency Borrowing shall be deemed to be in an amount equal to the
Equivalent Dollar Amount of such Eurocurrency Borrowing determined as of its
Denomination Date.
(b) Each Standby Borrowing shall be comprised entirely of Eurocurrency
Loans, Eurodollar Standby Loans, CD Loans or ABR Loans and each Competitive
Borrowing shall be comprised entirely of Eurodollar Competitive Loans or
27
Fixed Rate Loans as the Borrower may request pursuant to Section 2.03 or 2.04,
as applicable. Each Lender may at its option make any Eurocurrency Loan or
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided, however, that (i) any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement and (ii) in exercising such option,
the Lender shall use its reasonable efforts to minimize any increased costs to
the Borrower resulting therefrom (which obligation of the Lender shall not
require it to take, or refrain from taking, actions that it determines would
result in increased costs for which it will not be compensated hereunder or that
it determines would be otherwise disadvantageous to it and in the event of such
request for costs for which compensation is provided under this Agreement, the
provisions of Section 2.13(c) shall apply). Borrowings of more than one Type may
be outstanding at the same time; provided, however, that the Borrower shall not
be entitled to request any Borrowing which, if made, would result in (A) an
aggregate of more than fifteen separate Standby Loans of any Lender being
outstanding hereunder at any one time, (B) there being Loans outstanding in an
aggregate of more than six currencies or (C) there being more than 30
Eurocurrency Borrowings having an Interest Period of one month during any
twelve-month period. For purposes of the foregoing, Loans having different
Interest Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.
(c) Subject to Section 2.05 and except with respect to Loans made
pursuant to Section 2.02(e), each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds to such account as the Agent may designate, not later than 12:00 noon, New
York City time, or, in the case of funds in an Alternative Currency, 12:00 noon,
London time, and the Agent shall by 3:00 p.m., New York City time, or, in the
case of funds in an Alternative Currency, 3:00 p.m., London time, credit the
amounts so received to an account designated by the Borrower with the Agent or,
if a Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to the
respective Lenders. Competitive Loans shall be made by the Lender or Lenders
whose Competitive Bids therefor are accepted pursuant to Section 2.03 in the
amounts so accepted and Standby Loans shall be made by the Lenders pro rata in
accordance with
28
Section 2.16. Unless the Agent shall have received notice from a Lender prior to
(or, in the case of an ABR Borrowing, on) the date of any Borrowing that such
Lender shall not make available to the Agent such Lender's portion of such
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Borrowing in accordance with this Section
2.02(c) and the Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If the Agent shall have so
made funds available then, to the extent that such Lender shall not have made
such portion available to the Agent, such Lender and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Agent at
(i) in the case of the Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Agent to represent its cost of overnight or short-term funds
in the relevant currency (which determination shall be conclusive absent
manifest error). If such Lender shall repay to the Agent such corresponding
amount, such amount shall constitute such Lender's Loan as part of such
Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
(e) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.20(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Agent of the L/C Disbursement
and the Agent will promptly notify each Lender of such L/C Disbursement and its
Pro Rata Percentage thereof. Each Lender shall pay by wire transfer of
immediately available funds to the Agent not later than 2:00 p.m., New York City
time, on such date (or, if such Lender shall have received such notice later
than 12:00 (noon), New York City time, on any day, not later than 10:00 a.m.,
New York City time, on the immediately following Business Day), an amount equal
to such Lender's Pro Rata Percentage of such L/C Disbursement (it being
understood that such amount shall be deemed to constitute an ABR Loan of such
Lender and such payment shall be deemed to have reduced the L/C Exposure), and
the Agent will promptly pay
29
to the Issuing Bank amounts so received by it from the Lenders. The Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.20(e) prior to the time that any Lender makes any payment
pursuant to this paragraph (e); any such amounts received by the Agent
thereafter will be promptly remitted by the Agent to the Lenders that shall have
made such payments and to the Issuing Bank, as their interests may appear. If
any Lender shall not have made its Pro Rata Percentage of such L/C Disbursement
available to the Agent as provided above, such Lender and the Borrower severally
agree to pay interest on such amount, for each day from and including the date
such amount is required to be paid in accordance with this paragraph to but
excluding the date such amount is paid, to the Agent for the account of the
Issuing Bank at (i) in the case of the Borrower, the Alternate Base Rate, and
(ii) in the case of such Lender, for the first such day, the Federal Funds
Effective Rate, and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Competitive Bid Procedure. (a) In order to request
Competitive Bids, the Borrower shall hand deliver, telex or telecopy to the
Agent a duly completed Competitive Bid Request in the form of Exhibit A-1, to be
received by the Agent (i) in the case of a Eurodollar Competitive Borrowing, not
later than 10:00 a.m., New York City time, four Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 10:00 a.m., New York City time, one Business Day before a proposed
Competitive Borrowing. No Eurocurrency Loan, CD Loan or ABR Loan shall be
requested in, or made pursuant to, a Competitive Bid Request. A Competitive Bid
Request that does not conform substantially to the format of Exhibit A-1 may be
rejected in the Agent's sole discretion, and the Agent shall promptly notify the
Borrower of such rejection by telex or telecopier. Such request shall in each
case refer to this Agreement and specify (x) whether the Borrowing then being
requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing, (y) the
date of such Borrowing (which shall be a Business Day) and the aggregate
principal amount thereof which shall be in a minimum principal amount of
$5,000,000 and in an integral multiple of $1,000,000, and (z) the Interest
Period with respect thereto (which may not end after the Maturity Date).
Promptly after its receipt of a Competitive Bid Request that is not rejected as
aforesaid, the Agent shall invite by telex or telecopier (in the form of Exhibit
A-2) the Lenders to bid, on the terms and conditions of this Agreement, to
30
make Competitive Loans pursuant to such Competitive Bid
Request.
(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Lender must be received by the Agent via telex or
telecopier, in the form of Exhibit A-3, (i) in the case of a Eurodollar
Competitive Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case of a
Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the day
of a proposed Competitive Borrowing. Multiple bids shall be accepted by the
Agent. Competitive Bids that do not conform substantially to the format of
Exhibit A-3 may be rejected by the Agent after conferring with, and upon the
instruction of, the Borrower, and the Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each Competitive Bid
shall refer to this Agreement and specify (x) the principal amount (which shall
be in a minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower) of the Competitive Loan or Loans that the
Lender is willing to make to the Borrower, (y) the Competitive Bid Rate or Rates
at which the Lender is prepared to make the Competitive Loan or Loans and (z)
the Interest Period and the last day thereof. If any Lender shall elect not to
make a Competitive Bid, such Lender shall so notify the Agent via telex or
telecopier (I) in the case of Eurodollar Competitive Loans, not later than 9:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing and (II) in the case of Fixed Rate Loans, not later than 9:30 a.m.,
New York City time, on the day of a proposed Competitive Borrowing; provided,
however, that failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Competitive Loan as part of such Competitive
Borrowing. A Competitive Bid submitted by a Lender pursuant to this Section
2.03(b) shall be irrevocable.
(c) The Agent shall promptly notify the Borrower by telex or
telecopier of all the Competitive Bids made, the Competitive Bid Rate and the
principal amount of each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the Lender that made each bid. The Agent shall send
a copy of all Competitive Bids to the
31
Borrower for its records as soon as practicable after completion of the bidding
process set forth in this Section.
(d) The Borrower may in its sole and absolute discretion, subject only
to the provisions of this Section 2.03(d), accept or reject any Competitive Bid
referred to in Section 2.03(c). The Borrower shall notify the Agent by
telephone, confirmed by telex or telecopier in the form of a Competitive Bid
Accept/Reject Letter substantially in the form set forth in Exhibit A-4, whether
and to what extent it has decided to accept or reject any of or all the bids
referred to in Section 2.03(c), (y) in the case of a Eurodollar Competitive
Borrowing, not later than 10:30 a.m., New York City time, three Business Days
before a proposed Competitive Borrowing and (z) in the case of a Fixed Rate
Borrowing, not later than 10:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing; provided, however, that (i) the failure by the
Borrower to give such notice shall be deemed to be a rejection of all the bids
referred to in Section 2.03(c), (ii) the Borrower shall not accept a bid made at
a particular Competitive Bid Rate if the Borrower has decided to reject a bid
made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal amount
specified in the Competitive Bid Request, (iv) if the Borrower shall accept a
bid or bids made at a particular Competitive Bid Rate but the amount of such bid
or bids shall cause the total amount of bids to be accepted by the Borrower to
exceed the amount specified in the Competitive Bid Request, then the Borrower
shall accept a portion of such bid or bids in an amount equal to the amount
specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request, which
acceptance, in the case of multiple bids at such Competitive Bid Rate, shall be
made pro rata in accordance with the amount of each such bid at such Competitive
Bid Rate, and (v) except pursuant to clause (iv) above, no bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be for
a minimum of $1,000,000 or any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) above the amounts shall be rounded
to integral multiples of
32
$1,000,000 in a manner which shall be in the discretion of the Borrower. A
notice given by the Borrower pursuant to this Section 2.03(d) shall be
irrevocable.
(e) The Agent shall promptly notify each bidding Lender whether or not
its Competitive Bid has been accepted (and if so, in what amount and at what
Competitive Bid Rate) by telex or telecopier sent by the Agent, and each
successful bidder shall thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Loan in respect of which its bid has
been accepted.
(f) A Competitive Bid Request shall not be made within three Business
Days after the date of any previous Competitive Bid Request.
(g) If the Agent shall elect to submit a Competitive Bid in its
capacity as a Lender, it shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at which the other Lenders are
required to submit their bids to the Agent pursuant to Section 2.03(b).
(h) All Notices required by this Section shall be given in accordance
with Section 9.01.
SECTION 2.04. Standby Borrowing Procedure. In order to request a
Borrowing (other than a Competitive Borrowing or a deemed Borrowing pursuant to
Section 2.02(e), as to which this Section 2.04 shall not apply), the Borrower
shall hand deliver, telex or telecopy to the Agent a duly completed Standby
Borrowing Request in the form of Exhibit A-5 (a) in the case of a Eurocurrency
Borrowing, not later than 10:30 a.m., London time, three Business Days before a
proposed borrowing, (b) in the case of a Eurodollar Borrowing, not later than
10:30 a.m., New York City time, three Business Days before a proposed borrowing,
(c) in the case of a CD Borrowing, not later than 10:30 a.m., New York City
time, one Business Day before a proposed borrowing and (d) in the case of an ABR
Borrowing, not later than 10:30 a.m., New York City time, on the day of a
proposed borrowing. No Fixed Rate Loan shall be requested or made pursuant to a
Borrowing Request. Such notice shall be irrevocable and shall in each case
specify (i) whether the Borrowing then being requested is to be a Eurocurrency
Borrowing, a Eurodollar Borrowing, a CD Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a
33
Business Day) and the amount thereof, which, in the case of a Eurocurrency
Borrowing, shall be expressed in the Equivalent Dollar Amount; (iii) if such
Borrowing is to be a Eurocurrency Borrowing, the Alternative Currency in which
such Borrowing is to be denominated and the number and location of the account
to which funds are to be disbursed; and (iv) if such Borrowing is to be a
Eurocurrency Borrowing, Eurodollar Borrowing or CD Borrowing, the Interest
Period with respect thereto. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurocurrency Borrowing,
Eurodollar Borrowing or CD Borrowing is specified in any such notice, then the
applicable Borrower shall be deemed to have selected an Interest Period of one
month's duration, in the case of a Eurocurrency Borrowing or a Eurodollar
Borrowing, or 30 days' duration, in the case of a CD Borrowing. If the Borrower
shall not have given notice in accordance with this Section of its election to
refinance a Borrowing prior to the end of the Interest Period in effect for such
Borrowing, then the Borrower shall (unless such Borrowing is repaid at the end
of such Interest Period) be deemed to have given notice of an election to
refinance such Borrowing with an ABR Borrowing. The Agent shall promptly advise
the Lenders of any notice given pursuant to this Section and of each Lender's
portion of the requested Borrowing.
SECTION 2.05. Refinancings. The Borrower may refinance all or any part
of any Borrowing with a Borrowing of the same or a different Type made pursuant
to Section 2.03 or Section 2.04, subject to the conditions and limitations set
forth herein and elsewhere in this Agreement, including refinancings of
Competitive Borrowings with Standby Borrowings and Standby Borrowings with
Competitive Borrowings. Any Borrowing or part thereof so refinanced with a
Borrowing denominated in the same currency shall be deemed to be repaid in
accordance with Section 2.07 with the proceeds of a new Borrowing hereunder and
the proceeds of the new Borrowing, to the extent they do not exceed the
principal amount of the Borrowing being refinanced, shall not be paid by the
Lenders to the Agent or by the Agent to the applicable Borrower pursuant to
Section 2.02(c); provided, however, that (i) if the principal amount extended by
a Lender in a refinancing is greater than the principal amount extended by such
Lender in the Borrowing being refinanced, then such Lender shall pay such
difference to the Agent for distribution to the Lenders
34
described in (ii) below, (ii) if the principal amount extended by a Lender in
the Borrowing being refinanced is greater than the principal amount being
extended by such Lender in the refinancing, the Agent shall return the
difference to such Lender out of amounts received pursuant to (i) above, and
(iii) to the extent any Lender fails to pay the Agent amounts due from it
pursuant to (i) above, any Loan or portion thereof being refinanced shall not be
deemed repaid in accordance with Section 2.07 and shall be payable by the
applicable Borrower.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to each Lender,
through the Agent, on each March 31, June 30, September 30 and December 31, on
the date on which the Commitment of such Lender shall be terminated as provided
herein and on the Maturity Date, a facility fee (a "Facility Fee") equal to the
Applicable Percentage per annum in effect from time to time on the amount of the
Commitment of such Lender, whether used or unused, in effect from time to time
during the preceding quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or any date on which the Commitment of such
Lender shall be terminated). The Facility Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days. The Facility Fee due to
each Lender shall commence to accrue on the date hereof and shall cease to
accrue on the earlier of (i) the termination of the Commitment of such Lender
and (ii) the Maturity Date.
(b) The Borrower shall pay to the Agent, for its own account, agent
and administrative fees (the "Agent and Administrative Fees") at the times and
in the amounts agreed upon in the letter agreement dated August 20, 1996,
between the Borrower and the Agent.
(c) The Borrower agrees to pay (i) to each Lender, through the Agent,
on the last day of March, June, September and December of each year and on the
date on which the Commitment of such Lender shall be terminated as provided
herein, a fee (an "L/C Participation Fee") calculated on such Lender's Pro Rata
Percentage of the average daily aggregate L/C Exposure (excluding the portion
thereof attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the date hereof or ending with the
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Commitments of all Lenders shall have been terminated) at a
rate equal to the Applicable
35
Percentage from time to time used to determine the interest rate on Standby
Borrowings comprised of Eurodollar Standby Loans pursuant to Section 2.08, and
(ii) to the Issuing Bank with respect to each Letter of Credit the standard
fronting, issuance and drawing fees, if any, as may be specified in the Issuing
Bank Agreement (the "Issuing Bank Fees"). All L/C Participation Fees and Issuing
Bank Fees shall be computed on the basis of the actual number of days elapsed in
a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Agent for distribution, if and as appropriate, among the Lenders
except that the Issuing Bank Fees shall be paid directly to the Issuing Bank.
Once paid, none of the Fees shall be refundable under any circumstances unless
such Fees were paid in error.
SECTION 2.07. Evidence of Indebtedness; Repayment of Loans. (a) The
Borrower hereby unconditionally promises to pay to the Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to properly repay the Loans in
accordance with the terms of this Agreement.
36
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Agent.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions of
Section 2.09, the Loans comprising each Eurocurrency Borrowing and Eurodollar
Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 360 days) at a rate per annum equal to (i) in the
case of each Eurocurrency Loan or Eurodollar Standby Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Percentage, and
(ii) in the case of each Eurodollar Competitive Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Competitive Margin offered
by the Lender making such Loan and accepted by the Borrower pursuant to Section
2.03. Interest on each Eurocurrency Borrowing and Eurodollar Borrowing shall be
payable on each applicable Interest Payment Date. The LIBO Rate for each
Interest Period shall be determined by the Agent in accordance with the
definition of LIBO Rate herein. The Agent shall promptly advise the applicable
Borrower and each Lender, as appropriate, of such determination.
(b) Subject to the provisions of Section 2.09, the Loans comprising
each CD Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted CD Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage. Interest on each CD Borrowing shall be payable on each
applicable Interest Payment Date. The Adjusted CD Rate for each Interest Period
shall be determined by the Agent in accordance with the definition of Adjusted
CD Rate herein. The Agent shall promptly advise the Borrower and each Lender of
such determination.
(c) Subject to the provisions of Section 2.09, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of (i) 365 or 366 days, as the case may be,
during any period in which the Alternate Base Rate is based on the Prime Rate,
and (ii) 360 days, during any period in which the Alternate Base Rate is based
on the Base CD Rate or the Federal Funds Effective Rate) at a rate per annum
37
equal to the Alternate Base Rate. Interest on each ABR Borrowing shall be
payable on each applicable Interest Payment Date. The Alternate Base Rate shall
be determined by the Agent in accordance with the definition of Alternate Base
Rate herein.
(d) Subject to the provisions of Section 2.09, each Fixed Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03. Interest on each Fixed Rate Loan shall be payable on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement.
SECTION 2.09. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, whether by scheduled maturity, notice of prepayment, acceleration
or otherwise, the Borrower shall on demand from time to time from the Agent pay
interest, to the extent permitted by law, on such defaulted amount up to (but
not including) the date of actual payment (after as well as before judgment) at
a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Alternate Base Rate plus 2%.
SECTION 2.10. Alternate Rate of Interest. (a) In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurocurrency Borrowing or a Eurodollar Borrowing the
Agent shall have determined (i) that deposits in the principal amounts of the
Loans comprising such Borrowing and in the currency in which such Loan is to be
denominated are not generally available in the relevant market, or that the
rates at which such deposits are being offered will not adequately and fairly
reflect the cost to any Lender of making or maintaining its Eurocurrency Loan or
Eurodollar Loan, as applicable, during such Interest Period, or that reasonable
means do not exist for ascertaining the LIBO Rate, or (ii) in the case of a
Eurocurrency Borrowing, that there shall have occurred any change in national or
international financial, political or economic conditions (including the
imposition of or any change in exchange controls) or currency exchange rates
which would make it impracticable to make Loans denominated in the applicable
Alternative Currency, the Agent shall, as promptly as
38
practicable, give written, telex or telecopy notice of such determination to the
Borrower and the Lenders. In the event of any such determination, until the
Agent shall have advised the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, (A) any request by the Borrower for
a Eurodollar Competitive Borrowing pursuant to Section 2.03 shall be of no force
and effect and shall be denied by the Agent, (B) any request by the Borrower for
a Eurodollar Standby Borrowing pursuant to Section 2.04 shall be deemed to be a
request for an ABR Borrowing and (C) any request by the Borrower for a
Eurocurrency Borrowing pursuant to Section 2.04 shall be deemed to be a request
by the Borrower for an ABR Borrowing.
(b) In the event, and on each occasion, that on or before the day on
which the Adjusted CD Rate for a CD Borrowing is to be determined the Agent
shall have determined that such Adjusted CD Rate cannot be determined for any
reason, including the inability of the Agent to obtain sufficient bids in
accordance with the terms of the definition of Fixed CD Rate, or the Agent shall
determine that the Adjusted CD Rate for such CD Borrowing will not adequately
and fairly reflect the cost to any Lender of making or maintaining its CD Loan
during such Interest Period, the Agent shall, in a timely manner, give written
or telex notice of such determination to the Borrower and the Lenders. In the
event of any such determination, any request by the Borrower for a CD Borrowing
pursuant to Section 2.04 shall, until the Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, be deemed to be a request for an ABR Borrowing.
SECTION 2.11. Termination and Reduction of Commitments. (a) The
Commitments and the L/C Commitments shall be automatically terminated on the
Maturity Date.
(b) Upon at least five Business Days' prior irrevocable written or
telex notice to the Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Total
Commitment; provided, however, that (i) each partial reduction of the Total
Commitment shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $10,000,000 and (ii) no such termination or reduction shall
be made which would reduce the Total Commitment to an amount less than the
aggregate outstanding principal amount of the Competitive Loans. If, following
any partial reduction of
39
the Total Commitment, the Total Commitment (as so reduced) shall be less than
the Eurocurrency Sublimit, the Eurocurrency Sublimit shall be automatically
reduced so as to equal the Total Commitment.
(c) In the event that the aggregate Proceeds from all Asset Sales
after the date of this Agreement shall exceed 30% of Consolidated Total Assets
as of the end of the preceding fiscal year, then at the time of each Asset Sale
(including the Asset Sale that results in the aggregate Proceeds from Asset
Sales exceeding 30% of Consolidated Total Assets as of the end of the preceding
fiscal year) the Commitments shall be automatically and permanently reduced by
an amount equal to 50% of the Proceeds of such Asset Sale in excess of 30% of
Consolidated Total Assets as of the end of the preceding fiscal year aggregate
amount. If any reduction of the Commitments required by this paragraph would
result in the Total Commitment being less than the aggregate principal amount of
the outstanding Competitive Loans, such reduction shall be deferred for the
minimum period necessary to avoid such result.
(d) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Agent for the accounts of the Lenders, on the date of
each termination or reduction, the Facility Fees on the amount of the
Commitments so terminated or reduced accrued through the date of such
termination or reduction.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Standby Borrowing, in whole or in part,
upon giving written or telex notice (or telephone notice promptly confirmed by
written or telex notice) to the Agent before 10:00 a.m., New York City time (or,
in the case of any Eurocurrency Borrowing, 10:00 a.m., London time), three
Business Days prior to prepayment; provided, however, that each partial
prepayment shall be in an amount which is (or the Equivalent Dollar Amount of
which is) an integral multiple of $1,000,000 and not less than $5,000,000. The
Borrower shall not have the right to prepay any Competitive Borrowing.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.11, the Borrower shall pay or prepay so much of the
Standby Borrowings as shall be necessary in order that the Aggregate Revolving
40
Credit Exposure shall not exceed the Total Commitment after giving effect to
such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the applicable Borrower to prepay such Borrowing
(or portion thereof) by the amount stated therein on the date stated therein.
All prepayments under this Section shall be subject to Section 2.15 but
otherwise without premium or penalty. All prepayments under this Section shall
be accompanied by accrued interest on the principal amount being prepaid to the
date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or Issuing
Bank of the principal of or interest on any Eurocurrency Loan, Eurodollar Loan,
CD Loan or Fixed Rate Loan made by such Lender or any Fees or other amounts
payable hereunder (other than changes in respect of taxes imposed on the overall
net income of such Lender or Issuing Bank by any jurisdiction or any political
subdivision thereof) or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender or such Issuing Bank (except
any such reserve requirement which is already reflected in the definition of the
applicable Rate), or shall impose on such Lender or such Issuing Bank or the
London interbank market any other condition affecting this Agreement or any
Eurocurrency Loan, Eurodollar Loan, CD Loan or Fixed Rate Loan made by such
Lender or any Letter of Credit or participation therein, and the result of any
of the foregoing shall be to increase the cost to such Lender or Issuing Bank of
making or maintaining any Eurocurrency Loan, Eurodollar Loan, CD Loan or Fixed
Rate Loan or increase the cost to any Lender of issuing or maintaining any
Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or such Issuing Bank to be material, then the
applicable Borrower shall pay to such
41
Lender or such Issuing Bank, as the case may be, upon demand such additional
amount or amounts as will compensate such Lender or such Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.
Notwithstanding the foregoing, no Lender shall be entitled to request
compensation under this paragraph with respect to any Competitive Loan if it
should have been aware of the change giving rise to such request at the time of
submission of the Competitive Bid pursuant to which such Competitive Loan shall
have been made.
(b) If any Lender or Issuing Bank shall have determined that the
applicability of any law, rule, regulation or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption after the date
hereof of any other law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
(or any lending office of such Lender) or any Issuing Bank or any Lender's or
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, has or would have the effect of reducing the rate of return on such
Lender's or Issuing Bank's capital or on the capital of such Lender's or Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made or participations in Letters of Credit purchased by such Lender pursuant
hereto or the Letters of Credit issued by such Issuing Bank pursuant hereto to a
level below that which such Lender or Issuing Bank or such Lender's or Issuing
Bank's holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or Issuing Bank's policies
and the policies of such Lender's or Issuing Bank's holding company with respect
to capital adequacy) by an amount deemed by such Lender or Issuing Bank to be
material, then from time to time the Borrower shall pay to such Lender or
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank or such Lender's or Issuing Bank's
holding company for any such reduction suffered.
42
(c) A certificate of a Lender or Issuing Bank setting forth such
amount or amounts as shall be necessary to compensate such Lender or Issuing
Bank, as applicable, as specified in paragraph (a) or (b) above, as the case may
be, shall be delivered to the Borrower. The Borrower shall pay each Lender or
Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after the receipt of the same. In the event any Lender delivers
such a certificate, the Borrower may, at its sole expense and effort, require
such Lender to transfer and assign, without recourse (in accordance with Section
9.04) all its interests, rights and obligations under this Agreement to an
assignee which shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided, however, that
(i) such assignment shall not conflict with any law, rule or regulation or order
of any Governmental Authority, (ii) the Borrower shall have received a written
consent of the Agent in the case of an assignee that is not a Lender, which
consent shall not unreasonably be withheld, and (iii) the Borrower or such
assignee shall have paid to the assigning Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the Loans
made by it hereunder and all other amounts owed to it hereunder.
(d) Failure on the part of any Lender or the Issuing Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's or Issuing Bank's right to demand
compensation with respect to such period or any other period.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section shall survive
the payment in full of the principal of and interest on all Loans made
hereunder.
SECTION 2.14. Change in Legality. (a) Notwithstanding any other
provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurocurrency Loan or Eurodollar Loan or to give effect
to its obligations as contemplated hereby with respect to any Eurocurrency Loan
43
or Eurodollar Loan, then, by written notice to the Borrower and to the Agent,
such Lender may:
(i) declare that Eurocurrency Loans or Eurodollar Loans, as
the case may be, shall not thereafter be made by such Lender hereunder,
whereupon such Lender shall not submit a Competitive Bid in response to
a request for Eurodollar Competitive Loans and any request by the
Borrower for a Eurocurrency Loan or Eurodollar Standby Borrowing, as
the case may be, shall, as to such Lender only, be deemed a request for
an ABR Loan to the Borrower unless such declaration shall be
subsequently withdrawn; and
(ii) require that all outstanding Eurocurrency Loans or
Eurodollar Loans, as the case may be, made by it be converted to ABR
Loans, in which event all such Eurocurrency Loans or Eurodollar Loans,
as the case may be, shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below
(such conversion to be made, in the case of a Eurocurrency Loan, into
dollars at the applicable Spot Exchange Rate).
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurocurrency Loans or Eurodollar Loans, as the case may be, that would
have been made by such Lender or the converted Eurocurrency Loans or Eurodollar
Loans of such Lender shall instead be applied to repay the ABR Loans made by
such Lender in lieu of, or resulting from the conversion of, such Eurocurrency
Loans or Eurodollar Loans.
(b) For purposes of this Section, a notice to the Borrower by any
Lender shall be effective as to each Eurocurrency Loan or Eurodollar Loan, as
the case may be, if lawful, on the last day of the Interest Period then
applicable to such Eurocurrency Loan or Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense which such Lender may sustain or incur as a
consequence of (a) any failure by the Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by the Borrower to borrow or to
44
refinance any Loan hereunder after irrevocable notice of such borrowing or
refinancing has been given pursuant to Section 2.03 or 2.04, (c) any payment,
prepayment, assignment pursuant to Section 2.13(c), conversion of a Eurocurrency
Loan or Eurodollar Loan pursuant to Section 2.14(a) or conversion of a
Eurocurrency Loan, Eurodollar Loan, CD Loan or Fixed Rate Loan required by any
other provision of this Agreement or otherwise made or deemed made on a date
other than the last day of the Interest Period applicable thereto, (d) any
default in payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable at the due date
thereof (whether by scheduled maturity, acceleration, irrevocable notice of
prepayment or otherwise) or (e) the occurrence of any Event of Default,
including, in each such case, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurocurrency Loan, Eurodollar Loan, CD Loan or Fixed Rate Loan. Such loss
or reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by such Lender, of (i) its cost of obtaining the funds for
the Loan being paid, prepaid, assigned, converted or not borrowed (based on the
LIBO Rate or Adjusted CD Rate or, in the case of a Fixed Rate Loan, the fixed
rate of interest applicable thereto) for the period from the date of such
payment, prepayment, assignment, conversion or failure to borrow to the last day
of the Interest Period for such Loan (or, in the case of a failure to borrow,
the Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so paid,
prepaid, assigned, converted or not borrowed for such period or Interest Period,
as the case may be. A certificate of any Lender setting forth any amount or
amounts which such Lender is entitled to receive pursuant to this Section and
evidencing a loss suffered by such Lender of such amount or amounts shall be
delivered to the Borrower.
SECTION 2.16. Pro Rata Treatment. Except as required under Section
2.14, each Standby Borrowing, each payment or prepayment of principal of any
Standby Borrowing, each payment of interest on the Standby Loans, each payment
of the Facility Fees and L/C Participation Fees, each reduction of the
Commitments and each refinancing of any Borrowing with a Standby Borrowing of
any Type, shall be
45
allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Standby
Loans). Each payment of principal of any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective principal amounts of their outstanding
Competitive Loans comprising such Borrowing. Each payment of interest on any
Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Competitive Loans comprising
such Borrowing. For purposes of determining the available Commitments of the
Lenders at any time, each outstanding Competitive Borrowing shall be deemed to
have utilized the Commitments of the Lenders (including those Lenders which
shall not have made Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Commitments. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the Agent
may, in its discretion, round each Lender's percentage of such Borrowing to the
next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower , or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means (other than
an assignment pursuant to Section 2.13(c) or 10.04), obtain payment (voluntary
or involuntary) in respect of any Standby Loan or L/C Disbursement as a result
of which the unpaid principal portion of its Standby Loans and participations in
L/C Disbursements shall be proportionately less than the unpaid principal
portion of the Standby Loans and participations in L/C Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Standby Loans and L/C Exposure of
such other Lender, so that the aggregate unpaid principal amount of the Standby
Loans and L/C Exposure and participations in the Standby Loans and L/C Exposure
held by each Lender shall be in the same proportion to the aggregate unpaid
principal amount of
46
all Standby Loans and L/C Exposure then outstanding as the principal amount of
its Standby Loans and L/C Exposure prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all Standby
Loans outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section and the payment
giving rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrower expressly
consents to the foregoing arrangements and agrees that any Lender holding a
participation in a Standby Loan or L/C Disbursement deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by such Borrower to such
Lender by reason thereof as fully as if such Lender had made a Standby Loan
directly to such Borrower in the amount of such participation.
SECTION 2.18. Payments. (a) The Borrower shall make each payment
(including principal of or interest on the Loans or any L/C Disbursement or any
Fees or other amounts) hereunder and under any other Loan Document to such
account of the Agent as the Agent shall have specified, not later than 10:30
a.m., local time, at the place of payment, on the date when due, in the currency
in which such Loan was made and in federal funds or such other immediately
available funds as may then be customary for the settlement of international
transactions in the relevant currency at such place. The Borrower shall make
each payment of Fees not later than 12:00 noon, New York time, on the date when
due in dollars in immediately available funds to the Agent at its address
referred to in Section 9.01.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may (except as otherwise provided in the definition
of "Interest Period") be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of interest
or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with
47
Section 2.18, free and clear of and without deduction for any and all present or
future taxes, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding taxes imposed on the Agent's or any Lender's or
any Issuing Bank's (or any transferee's or assignee's, including a participation
holder's (any such entity a "Transferee")) net income and franchise taxes
imposed on the Agent or any Lender or any Issuing Bank (or Transferee) by any
jurisdiction or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to the Lenders
or any Issuing Bank (or any Transferee) or the Agent, (i) the sum payable shall
be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) such Lender or such Issuing Bank (or Transferee) or the Agent (as
the case may be) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
taxing authority or other Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender, Issuing Bank (or
Transferee) and the Agent for the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by such Lender or such Issuing Bank (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and reasonable out-of-pocket expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within 30 days after the date any
Lender or Issuing Bank (or Transferee) or the Agent, as the case may be, makes
written demand therefor, which demand
48
may be made after such Lender, Issuing Bank (or Transferee) or the Agent, in its
sole discretion (reasonably exercised) and at the sole expense of the applicable
Borrower, determines to challenge or contest such assertion of Taxes or Other
Taxes. After the Borrower makes full payment to the Lender, Issuing Bank (or
Transferee) or the Agent with respect to such indemnification for Taxes or Other
Taxes asserted, if such Lender, Issuing Bank (or Transferee) or the Agent
believes in its sole discretion that reasonable grounds exist to challenge or
contest the Taxes or Other Taxes imposed, then such Lender, Issuing Bank (or
Transferee) or the Agent, as the case may be, shall so contest or challenge in
good faith the Taxes or Other Taxes asserted, which contest or challenge shall
be at the sole expense of such Borrower. If a Lender, Issuing Bank (or
Transferee) or the Agent shall become aware that it is entitled to receive a
refund in respect of Taxes or Other Taxes, it shall promptly notify the Borrower
of the availability of such refund and shall, within 30 days after receipt of a
request by such Borrower, apply for such refund at the Borrower's reasonable
out-of-pocket expense. If any Lender, Issuing Bank (or Transferee) or the Agent
receives a refund in respect of any Taxes or Other Taxes for which such Lender,
Issuing Bank (or Transferee) or the Agent has received payment from the Borrower
hereunder it shall promptly notify such Borrower of such refund and shall
promptly upon receipt repay such refund to the Borrower, net of all
out-of-pocket expenses of such Lender or Issuing Bank and without interest;
provided, however, that the Borrower, upon the request of such Lender, Issuing
Bank (or Transferee) or the Agent, agrees to return such refund (plus penalties,
interest or other charges) to such Lender, Issuing Bank (or Transferee) or the
Agent in the event such Lender, Issuing Bank (or Transferee) or the Agent is
required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender, Issuing
Bank (or Transferee) or the Agent, the Borrower will furnish to the Agent, at
its address referred to in Section 9.01, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section shall survive
the payment in full of the principal of and interest on all Loans made
hereunder.
49
(f) On or before the date it becomes a party to this Agreement and
from time to time thereafter as renewals are due and upon any change in status
rendering any certificate or documents previously delivered pursuant to this
Section 2.19(f) invalid or inaccurate, each Lender, Issuing Bank or Transferee
that is organized outside the United States or Germany shall (but (x) in the
case of a Transferee or (y) in the case of a Lender or Issuing Bank with respect
to any renewal or change in status, only if legally able to do so) upon written
request of the Borrower, deliver to the Borrower such certificates, documents or
other evidence, as specified by the Borrower and, as the case may be, required
by, in the case of a Borrower organized in the United States and a non-United
States Lender or Issuing Bank, the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form 1001 or Form 4224 and any other
certificate or statement of exemption required by Treasury Regulation Section
1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Lender (or Transferee) establishing that
such payment is, as the case may be, (i) not subject to withholding under the
Code because such payment is effectively connected with the conduct by such
Lender, Issuing Bank or Transferee of a trade or business in the United States
or (ii) totally exempt from United States tax under a provision of an applicable
tax treaty. Unless the Borrower and the Agent have received forms or other
documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, as the case may be, or are subject to
such tax at a rate reduced by an applicable tax treaty, the Borrower or the
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender, Issuing Bank or Transferee or
assignee organized under the laws of a jurisdiction outside the United States or
Germany, as the case may be.
(g) A Borrower shall not be required to pay any additional amounts to
any Lender, Issuing Bank or Transferee in respect of United States withholding
tax pursuant to Section 2.19(a) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Lender, Issuing Bank or
Transferee to comply with the provisions of Section 2.19(f) unless such failure
results from (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the application
or
50
interpretation thereof, in each case after the Effective Date (and, in the case
of a Transferee, after the date of assignment or transfer); provided, however,
that the Borrower shall be required to pay those amounts to any Lender, Issuing
Bank or Transferee that it was required to pay hereunder prior to the failure of
such Lender, Issuing Bank or Transferee to comply with the provisions of Section
2.19(f).
(h) Any Lender, Issuing Bank or Transferee claiming any additional
amounts payable pursuant to this Section shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document in a timely manner requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole and reasonable
determination of such Lender, Issuing Bank or Transferee be otherwise
disadvantageous to such Lender, Issuing Bank or Transferee.
SECTION 2.20. Letters of Credit. (a) General. The Borrower may request
the issuance of a Letter of Credit for its own account, in a form reasonably
acceptable to the Agent and the Issuing Bank, at any time and from time to time
while the Commitments remain in effect. Each Letter of Credit shall be
denominated in dollars. This Section shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall hand deliver
or telecopy to the Issuing Bank and the Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. Following receipt of such notice and
prior to the issuance of the requested Letter of Credit or
51
the applicable amendment, renewal or extension, the Agent shall notify the
Borrower and the Issuing Bank of the amount of the Aggregate Revolving Credit
Exposure and the aggregate principal amount of the outstanding Competitive
Borrowings after giving effect to (i) the issuance, amendment, renewal or
extension of such Letter of Credit, (ii) the issuance or expiration of any other
Letter of Credit that is to be issued or will expire prior to the requested date
of issuance of such Letter of Credit and (iii) the borrowing or repayment of any
Standby Loans or Competitive Loans that (based upon notices delivered to the
Agent by the Borrower) are to be borrowed or repaid prior to the requested date
of issuance of such Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if, and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that, after giving effect to such issuance, amendment, renewal or
extension (A) the L/C Exposure shall not exceed $25,000,000 and (B) the sum of
the Aggregate Revolving Credit Exposure and the aggregate principal amount of
outstanding Competitive Borrowings shall not exceed the Total Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close
of business on the earlier of the date one year after the date of the issuance
of such Letter of Credit and the date that is five Business Days prior to the
Maturity Date, unless such Letter of Credit expires by its terms on an earlier
date.
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each such Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Pro Rata Percentage of the aggregate amount available to be drawn under such
Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Agent, for the account of the Issuing
Bank, such Lender's Pro Rata Percentage of each L/C Disbursement made by such
Issuing Bank and not reimbursed by the Borrower forthwith on the date due as
provided in Section 2.02(e). Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including
52
the occurrence and continuance of a Default or an Event of Default or the
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall pay to the Agent an amount
equal to such L/C Disbursement not later than two hours after the Borrower shall
have received notice from such Issuing Bank that payment of such draft will be
made, or, if the Borrower shall have received such notice later than 10:00 a.m.,
New York City time, on any Business Day, not later than 10:00 a.m., New York
City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or
provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any
Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any
Letter of Credit, any Issuing Bank, the Agent or any Lender or any
other person, whether in connection with this Agreement or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other
53
document that does not comply with the terms of such
Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
any Issuing Bank, the Lenders, the Agent or any other person or any
other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of any Issuing Bank. However, the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrower to the extent of any damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are caused by such
Issuing Bank's negligence or misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof; it
is understood that each Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in making any
payment under any Letter of Credit (i) an Issuing Bank's exclusive reliance on
the documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute
misconduct or negligence of an Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all
54
documents purporting to represent a demand for payment under a Letter of Credit.
Such Issuing Bank shall as promptly as possible give telephonic notification,
confirmed by telecopy, to the Agent and the Borrower of such demand for payment
and whether such Issuing Bank has made or will make an L/C Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such L/C Disbursement. The Agent shall
promptly give each Lender notice thereof.
(h) Interim Interest. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of such Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(e), at the rate per annum that would
apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of an Issuing Bank. An Issuing Bank may
resign at any time by giving 180 days' prior written notice to the Agent, the
Lenders and the Borrower, and may be removed at any time by the Borrower by
notice to the Issuing Bank, the Agent and the Lenders. Subject to the next
succeeding paragraph, upon the acceptance of any appointment as an Issuing Bank
hereunder by a Lender that shall agree to serve as successor Issuing Bank, such
successor shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit hereunder.
At the time such removal or resignation shall become effective, the Borrower
shall pay all accrued and unpaid fees pursuant to Section 2.06(c)(ii). The
acceptance of any appointment as an Issuing Bank hereunder by a successor Lender
shall be evidenced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks,
55
as the context shall require. After the resignation or removal of an Issuing
Bank hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.
(j) Cash Collateralization. If any Event of Default (other than an
Event of Default described in clause (g) or (h) of Article VII) shall occur and
be continuing, the Borrower shall, on the Business Day it receives notice from
the Agent or the Required Lenders (or, if the maturity of the Loans has been
accelerated, Lenders holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of all outstanding
Letters of Credit) thereof and of the amount to be deposited, or, if an Event of
Default described in clause (g) or (h) of Article VII shall occur, on the
Business Day of such occurrence, deposit in an account with the Agent, for the
benefit of the Lenders, an amount in cash equal to the L/C Exposure as of such
date. Such deposit shall be held by the Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits in Permitted Investments, which investments shall be made at
the option and sole discretion of the Agent, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall (i) automatically be applied by the
Agent to reimburse the Issuing Bank for L/C Disbursements for which they have
not been reimbursed, (ii) be held for the satisfaction of the reimbursement
obligations of the Borrower for the L/C Exposure at such time and (iii) if the
maturity of the Loans has been accelerated (but subject to the consent of
Lenders holding participations in outstanding Letters of Credit representing
greater than 50% of the aggregate undrawn amount of all outstanding Letters of
Credit), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.
56
SECTION 2.21 Extension of Maturity Date. (a) The Borrower may, by
notice to the Agent (which shall promptly deliver a copy to each of the Lenders)
given not more than 60 days prior to any anniversary of the date hereof while
the Commitments remain in effect, request that the Lenders extend the Maturity
Date for an additional one year period (but in no event beyond the fifth
anniversary of the Closing Date) from the Maturity Date then in effect (the
"Existing Maturity Date"). Each Lender shall, by notice to the Borrower and the
Agent given not later than the 10th Business Day after the date of the
Borrower's notice, advise the Borrower whether or not such Lender agrees to such
extension (and any Lender that does not so advise the Borrower on or before such
day shall be deemed to have advised the Borrower that it will not agree to such
extension).
(b) If (and only if) Lenders holding Commitments that represent at
least 60% of the total Commitments on the 60th day prior to the applicable
anniversary of the date hereof shall have agreed to extend the Existing Maturity
Date (such Lenders being called the "Continuing Lenders"), then (i) the Maturity
Date shall be extended to the first anniversary of the Existing Maturity Date
(provided, that if such date is not a Business Day, then the Maturity Date as so
extended shall be the next following Business Day), and (ii) the Commitment of
each Lender that is not a Continuing Lender shall terminate on the Existing
Maturity Date (with the result that the total Commitments will decrease by the
amount of such Commitment), and all Loans of each such Lender shall become due
and payable, together with all interest accrued thereon and all other amounts
owed to such Lender hereunder, on the Existing Maturity Date.
Notwithstanding the foregoing, no extension of the Maturity Date shall
be effective with respect to any Lender unless, on and as of the Existing
Maturity Date, the conditions set forth in paragraphs (b) and (c) of Section
4.01 shall be satisfied (with all references to a Borrowing being deemed to be
references to such extension) and the Agent shall have received a certificate to
that effect dated the Existing Maturity Date and executed by a Financial Officer
of the Borrower.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and the
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business in
every jurisdiction where such qualification is required, except where the
failure so to qualify would not result in a Material Adverse Effect, and (d) in
the case of the Borrower, has the power and authority to execute, deliver and
perform its obligations under this Agreement and each other agreement or
instrument contemplated hereby and to borrow and incur other obligations
hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance
by the Borrower of this Agreement and the borrowings and other obligations
hereunder by the Borrower (collectively, the "Transactions") (a) have been duly
authorized by all requisite action, including, if required, stockholder action
on the part of the Borrower, and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of the Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any indenture, agreement or other instrument to which the Borrower or any
Subsidiary is a party or by which any of them or any of their property is or may
be bound, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary.
SECTION 3.03. Enforceability. This Agreement has been duly executed
and delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by the Borrower will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms.
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SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except
such as have been made or obtained and are in full force and effect.
SECTION 3.05. Financial Statements. The Borrower has heretofore
furnished to the Lenders the combined balance sheets and statements of income
and cash flow of the Borrower and its combined Subsidiaries as of and for the
fiscal year ended May 31, 1996, audited by and accompanied by the opinion of
Xxxxxx Xxxxxxxx & Co., independent public accountants, and the unaudited
combined balance sheets and statements of income and cash flow of the Borrower
as of and for the fiscal quarter ended August 31, 1996, each certified by the
chief financial officer (or, in the absence of such a position, comptroller) of
the Borrower or Manor Care. Such financial statements present fairly the
financial condition and results of operations of the Borrower and its combined
Subsidiaries as of such dates and for such periods. Such balance sheets and the
notes thereto disclose all material liabilities, direct or contingent, of the
Borrower and its combined subsidiaries as of the dates thereof. Such financial
statements and monthly summaries of pretax income or loss were prepared in
accordance with GAAP applied on a consistent basis.
SECTION 3.06. No Material Adverse Change. As of the date hereof, there
has been no material adverse change in the business, assets, property or
condition, financial or otherwise, of the Borrower and the Subsidiaries, taken
as a whole, since May 31, 1996 (it being understood that changes in general
economic conditions shall not be deemed to constitute such a material adverse
change).
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each
of the Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties and assets for their
intended purposes. All such material properties and assets are free and clear of
Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of the Borrower and the Subsidiaries has complied with all
material obligations under all material
59
leases to which it is a party and all such leases are in full force and effect.
Each of the Borrower and the Subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.
(c) On and as of the date of the initial Credit Event under this
Agreement, the Borrower will own, or have a valid leasehold interest in, all of
the assets, business and operations currently conducted by the Lodging Business
(as defined in the Distribution Agreement), (other than assets since disposed of
prior to the date of such Borrowing in the ordinary course of business and
assets described on Schedule 3.07).
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the date
hereof a list of all Subsidiaries of the Borrower and the percentage ownership
interest of the Borrower therein.
SECTION 3.09. Litigation; Compliance with Laws. (a) There are not any
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary or any business,
property or rights of any such person (i) which involve any Loan Document or the
Transactions (excluding any such actions, suits or proceedings threatened by the
Lenders or the Agent) or (ii) as to which there is a reasonable probability of
an adverse determination and which, if such probable adverse determination
occurred, could, individually or in the aggregate, reasonably be anticipated to
result in a Material Adverse Effect.
(b) To the best knowledge of the Borrower, neither the Borrower nor
any of the Subsidiaries is in violation of any law, rule or regulation, or in
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
anticipated to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate or other restriction that has resulted or could reasonably be
anticipated to result in a Material Adverse Effect.
60
(b) Neither the Borrower nor any of its Subsidiaries is in default in
any manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be anticipated to result in a
Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower
nor any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will
be used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, (i) to purchase or carry Margin Stock or to extend credit to
others for the purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose, or (ii) for any purpose which
entails a violation of, or which is inconsistent with, the provisions of the
Regulations of the Board, including Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and the Subsidiaries
has filed or caused to be filed all Federal, state, local and foreign tax
returns required to have been filed by it and has paid or caused to be paid all
taxes shown to be due and payable on such returns or on any assessments received
by it, except taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary shall have set aside
on its books adequate reserves.
61
SECTION 3.15. No Material Misstatements. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of the
Borrower to the Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which the Borrower or any
ERISA Affiliate was required to file a report with the PBGC, and the present
value of all benefit liabilities under each Plan (based on those assumptions
used to fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed by more than $5,000,000 the value of the assets of such Plan.
Neither the Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability which remains unpaid and that could result in a Material Adverse
Effect. Neither the Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and to the best knowledge of
the Borrower no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, where such reorganization or termination has
resulted or could reasonably be expected to result, through increases in the
contributions required to be made to such Plan or otherwise, in a Material
Adverse Effect.
SECTION 3.17. Environmental Matters. The Borrower and each Subsidiary
has complied in all material respects with all Federal, state, local and other
statutes, ordinances, orders, judgments, rulings and regulations relating to
environmental pollution or to environmental regulation or control or to employee
health or safety. Neither the Borrower nor any Subsidiary has received notice of
any failure so to comply. The Borrower's and the Subsid- iaries' facilities do
not manage any hazardous wastes, hazardous substances, hazardous materials,
toxic substances, toxic pollutants or substances similarly denominated, as those
terms or similar terms are used in the Resource Conservation and Recovery Act,
the Comprehensive Environ-
62
mental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law, in material violation of any such
law or any regulations promulgated pursuant thereto.
SECTION 3.18. Solvency. As of the Effective Date and after giving
effect to the Distribution:
(a) The fair salable value of the assets of the Borrower and
each Significant Subsidiary will exceed the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities of such Borrower or Significant Subsidiary as such debts
and liabilities become absolute and mature.
(b) The assets of the Borrower and each Significant Subsidiary
will not constitute unreasonably small capital for such Borrower or
Significant Subsidiary to carry out its businesses as now conducted and
as proposed to be conducted including the capital needs of such
Borrower or Significant Subsidiary, taking into account the particular
capital requirements of the business conducted by such Borrower or
Significant Subsidiary and projected capital requirements and capital
availability thereof.
(c) Neither the Borrower nor any Significant Subsidiaries
intends to incur debts or liabilities beyond its ability to pay such
debts and liabilities as they mature, taking into account the timing
and amounts of cash to be received by it, and of amounts to be payable
on or in respect of its debts and liabilities. The cash flow of the
Borrower and each Significant Subsidiary, after taking into account all
anticipated uses of the cash of such Borrower or such Significant
Subsidiary, will at all times be sufficient to pay all such amounts on
or in respect of debt and liabilities of such Borrower or such
Significant Subsidiary when such amounts are required to be paid.
SECTION 3.19. Distribution. As of the Effective Date, the Distribution
will have been effected in a manner that is not materially different from the
description thereof in the Form 10 (including but not limited to the tax
consequences of the Distribution) and that will not materially adversely affect
the rights or interests of the Lenders or the creditworthiness of the Borrower.
63
ARTICLE IV. CONDITIONS OF LENDING
The effectiveness of this Agreement and the obligations of the Lenders
to make Loans and of the Issuing Bank to issue, extend or renew Letters of
Credit hereunder are subject to the satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing,
including on the date of each issuance, extension or renewal of a Letter of
Credit (each event being called a "Credit Event"):
(a) The Agent shall have received a notice of such Borrowing
as required by Section 2.03 or Section 2.04, as applicable (or such
notice shall have been deemed given in accordance with Section 2.04)
including on the date of each issuance, extension or renewal of a
Letter of Credit.
(b) The representations and warranties set forth in Article
III hereof (except (i) in the case of a refinancing of a Standby
Borrowing with a new Standby Borrowing that does not increase the
aggregate principal amount of the Loans of any Lender outstanding, the
representation set forth in Section 3.09(a), and (ii) in the case of a
refinancing of a Competitive Borrowing with a Standby Borrowing that
does not increase the aggregate principal amount of the Loans
outstanding, the representation set forth in Section 3.09(a), provided
that the exception contained in this clause (ii) shall be applicable
only if, on the date of the applicable Competitive Borrowing, the
Borrower satisfied all conditions for the making of a new Standby
Borrowing that did not refinance an existing Standby Borrowing) shall
be true and correct in all material respects on and as of the date of
such Credit Event with the same effect as though made on and as of such
date, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) The Borrower shall be in compliance with all the terms and
provisions set forth herein and in each other Loan Document on its part
to be observed or performed, and at the time of and immediately after
such Credit Event, no Event of Default or Default shall have occurred
and be continuing.
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Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Credit Event. On the Effective Date:
(a) All legal matters incident to this Agreement and the
borrowings hereunder shall be satisfactory to the Lenders and their
counsel and to the Issuing Bank and to Cravath, Swaine & Xxxxx, counsel
for the Agent.
(b) The Agent shall have received (i) a copy of the
certificate or articles of incorporation (or analogous documents) and
all amendments thereto of the Borrower, certified as of a recent date
by the Secretary of State (or other appropriate Governmental Authority)
of the state (or country) of its organization or such other evidence as
is reasonably satisfactory to the Agent; (ii) a certificate as to the
good standing (or other analogous certification to the extent
available) of the Borrower as of a recent date, from the appropriate
Secretary of State (or other appropriate Governmental Authority) or
such other evidence as is reasonably satisfactory to the Agent; (iii) a
certificate of the Secretary or Assistant Secretary of the Borrower
dated the Effective Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws (or such other analogous
documents to the extent available) of the Borrower as in effect on the
Effective Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of
Directors of the Borrower authorizing the execution, delivery and
performance of the Loan Documents and the borrowings hereunder, and
that such resolutions have not been modified, rescinded or amended and
are in full force and effect, (C) that the certificate or articles of
incorporation (or analogous documents) of the Borrower have not been
amended since the date of the last amendment thereto shown on the
certificate of good standing (or other analogous certification or such
other evidence reasonably satisfactory to the Agent) furnished pursuant
to clause (i) or (ii) above, and (D) as to the incumbency and specimen
signature of each officer executing any
65
Loan Document or any other document delivered in connection herewith on
behalf of the Borrower; (iv) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (iii) above; and (v)
such other documents as the Lenders or their counsel, the Issuing Bank
or Cravath, Swaine & Xxxxx, counsel for the Agent, may reasonably
request.
(c) The Agent shall have received a certificate of the
Borrower, dated the Effective Date and signed by a Financial Officer of
the Borrower confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 4.01.
(d) The Agent shall have received all Fees and other amounts
due and payable on or prior to the Effective Date.
(e) The Agent shall have received a favorable written opinion
of the General Counsel for Manor Care, dated the Effective Date and
addressed to the Lenders and the Issuing Bank, to the effect set forth
in Exhibit D, and the Borrower hereby instructs such counsel to deliver
such opinion to the Agent.
(f) The Agent shall have received evidence of the receipt by
the Borrower of all governmental and third party approvals necessary or
advisable, if any, in connection with the transactions contemplated by
this Agreement.
(g) The Lenders shall have received copies of the
Form 10 (including the Distribution Agreement attached
as an exhibit thereto).
(h) The Distribution shall have been effected and regular way
trading in the common stock of the Borrower shall have commenced on
The New York Stock Exchange.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect or the principal of or interest on any
Loan, any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, and until all Letters of Credit have been
66
canceled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, the
Borrower shall, and shall cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated (except
for the Distribution); comply in all material respects with all applicable laws,
rules, regulations and orders of any Governmental Authority, whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 5.02. Insurance. Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about
or in connection with the use of any properties owned, occupied or controlled by
it; and maintain such other insurance as may be required by law.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become
67
delinquent or in default, as well as all lawful and valid claims for labor,
materials and supplies or otherwise which, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto.
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Agent and each Lender:
(a) within 100 days after the end of each fiscal year, its
audited consolidated balance sheets and related statements of income
and cash flow, showing the financial condition of the Borrower and its
consolidated subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such subsidiaries
during such year, all audited by Xxxxxx Xxxxxxxx & Co. or other
independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the
Borrower on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year, its unaudited consolidated balance
sheets and related statements of income and cash flow, showing the
financial condition of the Borrower and its consolidated subsidiaries
as of the close of such fiscal quarter and the results of its
operations and the operations of such subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified
by one of the Financial Officers of the Borrower as fairly presenting
the financial condition and results of operations of the Borrower on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
68
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of the accounting firm or
Financial Officer of the Borrower opining on or certifying such
statements (which certificate, when furnished by an accounting firm,
may be limited to accounting matters and disclaim responsibility for
legal interpretations) (i) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii)
setting forth computations in reasonable detail satisfactory to the
Agent demonstrating compliance with the covenants contained in Sections
6.06, 6.13, 6.14 and 6.15;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of or all the functions of
said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Agent, the
Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
as to which there is a reasonable probability of an adverse
determination and which, if such probable
69
adverse determination occurred, could reasonably be
anticipated to result in a Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably
be anticipated to result in, a Material Adverse Effect.
SECTION 5.06. ERISA. (a) Comply in all material respects with the
applicable provisions of ERISA and (b) furnish to the Agent and each Lender (i)
as soon as possible, and in any event within 30 days after any Responsible
Officer of the Borrower or any ERISA Affiliate either knows or has reason to
know that any Reportable Event has occurred that alone or together with any
other Reportable Event could reasonably be expected to result in liability of
the Borrower or any ERISA Affiliate to the PBGC in an aggregate amount exceeding
$5,000,000, a statement of a Financial Officer of the Borrower setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice the Borrower or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a
trustee to administer any Plan or Plans, (iii) within 10 days after the due date
for filing with the PBGC pursuant to Section 412(n) of the Code of a notice of
failure to make a required installment or other payment with respect to a Plan,
a statement of a Financial Officer of the Borrower setting forth details as to
such failure and the action proposed to be taken with respect thereto, together
with a copy of such notice given to the PBGC and (iv) promptly and in any event
within 30 days after receipt thereof by the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received by the
Borrower or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability in excess of $500,000 or (B) a determination that a Multiemployer Plan
is, or is expected to be, terminated or in reorganization, in each case within
the meaning of Title IV of ERISA.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with GAAP consistently
applied and upon reasonable notice by any Lender permit any representatives
70
designated by such Lender, subject to Section 9.17 of this Agreement, to visit
and inspect the financial records and the properties of the Borrower or any
Subsidiary at reasonable times and as often as requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by any Lender to discuss the affairs, finances and condition of the
Borrower or any Subsidiary with the officers thereof and independent accountants
therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. Ownership. Subject to Section 6.05, maintain Quality
Hotels as a wholly owned Subsidiary, except that shares representing up to 10%
of the shares of any class of the capital stock of Quality Hotels (but not
representing more than 10% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of Quality Hotels) may be sold to
certain members of management, and maintain Choice Hotels Franchising as a
Subsidiary in which the Borrower owns shares representing not less than 88.9% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of Choice Hotels Franchising. Continue to own, directly or
indirectly, the operations of Choice Hotels Franchising substantially as they
exist on the date hereof.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender, the Issuing Bank
and the Agent that, so long as this Agreement shall remain in effect or the
principal of or interest on any Loan, any Fees or any other expenses or amounts
payable under any Loan Document shall be unpaid, and until all Letters of Credit
have been cancelled or have expired and all amounts drawn thereunder have been
reimbursed in full, unless the Required Lenders shall
71
otherwise consent in writing, the Borrower shall not, and shall not cause or
permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except (without duplication):
(a) Indebtedness existing on the date hereof and set forth in
Schedule 6.01(a) and any extensions, renewals or replacements of
existing mortgages and Capital Lease Obligations; provided, however,
that (i) the principal amount of any such extension, renewal or
replacement shall not exceed the principal amount of the mortgage or
Capital Lease Obligation so extended, renewed or replaced, (ii) the
mortgage or Capital Lease Obligation so extended, renewed or replaced
shall not be secured by any property or asset that was not already
pledged to secure the existing mortgage or Capital Lease Obligation,
and (iii) such extension, renewal or replacement is not on terms
materially more restrictive to the Borrower or its Subsidiaries or
materially less favorable to the Lenders than the mortgage or Capital
Lease Obligation so extended, renewed or replaced;
(b) Indebtedness represented by the Loan Documents; provided,
however, that Indebtedness consisting of commercial paper of the
Borrower may also be incurred pursuant to this clause (b) to the extent
the sum of such Indebtedness and the aggregate principal amount of
Loans then outstanding do not exceed the Total Commitment at such time
(subject to Section 6.01(n) to the extent such sum is in excess of
$100,000,000).
(c) Indebtedness incurred upon the acquisition of any property
or asset secured by Liens on such property or asset in accordance with
Section 6.02(b); provided, however, that the amount of such
Indebtedness shall not exceed the purchase price of any such property
or asset;
(d) Indebtedness secured by Liens permitted under
Section 6.02(i), 6.02(j) or 6.02(m);
(e) Indebtedness of Subsidiaries existing at the
time they are acquired by the Borrower and not incurred
in contemplation of such acquisition;
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(f) other Indebtedness of Subsidiaries not
prohibited by Section 6.09;
(g) Indebtedness of (i) the Borrower to any wholly owned
Subsidiary, Choice Hotels Franchising or Quality Hotels; (ii) any
wholly owned Subsidiary, Choice Hotels Franchising or Quality Hotels to
the Borrower; and (iii) any Subsidiary, Choice Hotels Franchising or
Quality Hotels to any wholly owned Subsidiary (or to Choice Hotels
Franchising or Quality Hotels)(for the purposes of this clause (g),
"wholly owned Subsidiary" includes any wholly owned subsidiary of
Choice Hotels Franchising and/or Quality Hotels, any Subsidiary that
would otherwise constitute a wholly owned Subsidiary but for directors'
qualifying shares or similar matters, and any Subsidiary the only
direct shareholders, members or participants in which are wholly owned
Subsidiaries, Choice Hotels Franchising or Quality Hotels);
(h) Indebtedness represented by notes or letters of credit
issued for the account of the Borrower or any Subsidiary in connection
with insurance policies and in a form substantially similar to the
notes or letters of credit issued for the account of the Borrower or
any Subsidiary set forth in Schedule 6.01(h) issued in connection with
existing insurance policies of the Borrower or such Subsidiary;
(i) Indebtedness represented by utility bonds, performance
bonds, state self insurance bonds and miscellaneous other bonds other
than those existing on the date hereof and listed in Schedule 6.01(a)
(including any extensions, renewals and replacements), the aggregate
principal amount of such Indebtedness at any one time not to exceed
$20,000,000 (subject to Section 6.01(n) to the extent in excess of
$20,000,000);
(j) Indebtedness of the Borrower consisting of Guarantees in
connection with pension and deferred compensation arrangements arising
in connection with the Distribution; provided, however, that the
aggregate amount of such Indebtedness shall not exceed $40,000,000;
(k) Indebtedness consisting of the Manor Care
Note;
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(l) Non-Recourse Hotel Indebtedness; provided, that, so long
as the Manor Care Note remains in effect or any principal, interest or
any other expenses or amounts payable thereunder shall be unpaid, the
proceeds of the incurrence of such Non-Recourse Hotel Indebtedness
shall be applied solely to prepay amounts outstanding under the Manor
Care Note;
(m) Indebtedness consisting of Sale and Lease-back
Transactions permitted under Section 6.03; and
(n) other unsecured Indebtedness of the Borrower in an
aggregate principal amount at any one time outstanding not to exceed
$100,000,000; provided, however, that the covenants and events of
default contained in any such Indebtedness with an aggregate principal
amount in excess of $10,000,000 shall not be more restrictive of the
Borrower and its Subsidiaries than those in this Agreement; and
provided further, that the aggregate amount of Guarantees by the
Borrower may not exceed $50,000,000.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights (excluding rights of first refusal) in respect of any
thereof, except (without duplication):
(a) Liens on property or assets of the Borrower and its
Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided, however, that such Liens shall secure only those
obligations which they secure on the date hereof except as otherwise
permitted hereunder;
(b) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided,
however, that (i) such Lien is not created in contemplation of or in
connection with such acquisition and (ii) such Lien does not apply to
any other property or assets of the Borrower or any Subsidiary;
(c) Liens for taxes not yet due or which are being
contested in compliance with Section 5.03;
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(d) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due or which are being
contested in compliance with Section 5.03;
(e) statutory liens of landlords in respect of
property leased by the Borrower or any Subsidiary;
(f) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(h) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(i) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any Subsidiary and
liens securing refinancings of existing mortgages; provided, however,
that the aggregate principal amount of the Indebtedness secured by such
security interests does not exceed $50,000,000; and provided further,
that (i) such security interests are incurred, and the Indebtedness
secured thereby is created, within 120 days after such acquisition, or
construction or refinancing, (ii) the Indebtedness secured thereby does
not exceed 80% of the fair market value of the subject real property,
improvements or equipment at the time of such acquisition, construction
or refinancing, and (iii) such security interests do not apply to the
subject property or assets of the Borrower or any Subsidiary other than
the purchased property or assets
75
or the property or assets subject to the mortgage being
refinanced, as the case may be;
(j) mortgages on properties listed on Schedule 6.02(j);
provided, however, that (i) such mortgages do not apply to the property
or assets of the Borrower or any Subsidiary other than the scheduled
properties and (ii) the aggregate principal amount of the Indebtedness
secured by such security interests does not exceed $100,000,000;
(k) Liens created in favor of the Lenders;
(l) Liens securing Indebtedness incurred pursuant
to Sections 6.01(l) or 6.09(ii); and
(m) other Liens to secure Indebtedness of the Borrower or any
Subsidiary; provided, however, that the aggregate principal amount of
the Indebtedness so secured at any time, when added to the net book
value of all property the subject of Sale and Lease-Back Transactions
(other than Sale and Lease-back Transactions referred to in the proviso
to Section 6.03) at such time, does not exceed 15% of Consolidated
Total Assets at such time.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any Sale
and Lease-Back Transaction unless immediately thereafter the net book value of
all property the subject of Sale and Lease-Back Transactions, when added to the
aggregate principal amount of Indebtedness of the Borrower or any Subsidiary
secured at such time by Liens permitted only under Section 6.02(m), does not
exceed 10% of Consolidated Total Assets at such time; provided, however, that
this Section 6.03 shall be deemed not to apply to any Sale and Lease-back
Transaction entered into by an SPC so long as (i) neither the Borrower nor any
other Subsidiary (x) provides credit support (including any undertaking,
agreement or instrument which would constitute Indebtedness) or has given or
made other assurances regarding repayment, (y) is directly or indirectly
personally liable or (z) is the lessor and (ii) the obligees will have recourse
solely against the assets of such SPC for repayment of the amounts owed in
connection with such Sale and Lease-back Transaction and any fees, indemnities,
expense reimbursements or other amounts of whatever nature accrued or payable in
connection with such Sale and Lease-back Transaction; and provided further,
that, so long as the Manor Care Note remains in
76
effect or any principal, interest or any other expenses or amounts payable
thereunder shall be unpaid, the proceeds of such Sale and Lease-back Transaction
shall be applied solely to prepay amounts outstanding under the Manor Care Note.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock, comparable ownership interests, evidences of
indebtedness or other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest in,
any other person, except:
(a) the investments and guarantees existing on the date hereof
set forth on Schedule 6.04 and investments by the Borrower or any
Subsidiary in the capital stock or comparable ownership interests of
the Subsidiaries, including by means of contributions by any Subsidiary
of Hotel Properties to the Borrower or a Subsidiary;
(b) loans or advances by the Borrower to Subsidiaries or by
Subsidiaries to the Borrower or other Subsidiaries, in each case to the
extent permitted under Section 6.01;
(c) purchases by the Borrower of the capital stock of Quality
Hotels held by Xxxxx Xxxxx; provided, however, that such purchases
shall not exceed $1,000,000 in the aggregate;
(d) Guarantees permitted under Section 6.01(j);
(e) Permitted Investments; and
(f) other investments, capital contributions, loans and
advances not to exceed at any time 15% of Consolidated Total Assets at
such time.
SECTION 6.05. Mergers and Consolidations. Merge into or consolidate
with any other person, or permit any other person to merge into or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or substantially all its assets whether now
owned or hereafter acquired, except that:
(a) (i) the Borrower may merge or consolidate with a
Subsidiary or (ii) a Subsidiary may merge or consolidate with the
Borrower so long as the Borrower is the surviving entity;
77
(b) any Subsidiary may merge or consolidate with
any Subsidiary;
(c) the Borrower or any Subsidiary may merge or consolidate
with another person; provided, however, that:
(i) the Borrower or such Subsidiary is the
surviving entity;
(ii) no Event of Default or event which, with notice or
the passage of time or both, would constitute an Event of
Default exists after giving effect to such merger or
consolidation; and
(iii) the Agent shall receive a certificate signed by a
Financial Officer of the Borrower of the Borrower, confirming
compliance with clause (ii) above;
(d) the Borrower and the Subsidiaries may
consummate the Distribution.
SECTION 6.06. Asset Sales. Consummate any Asset Sale, other than (i)
sales of receivables for collection (and not for financing or factoring
purposes) in the ordinary course of business, (ii) Asset Sales which, when added
to the Proceeds from all other Asset Sales previously consummated in the same
fiscal year, would not exceed 10% of Consolidated Total Assets as of the end of
the preceding fiscal year, and (iii) Asset Sales, in a single transaction or
series of transactions, of Hotel Properties or the SPC; provided that no Asset
Sale referenced in clause (iii) above shall be permitted if (a) a Default has
occurred or would occur after giving effect to such Asset Sale, or (b) so long
as the Manor Care Note remains in effect or any principal, interest or any other
expenses or amounts payable thereunder shall be unpaid, the net proceeds of such
Asset Sale are used other than to prepay (x) amounts outstanding under the Manor
Care Note or (y) Indebtedness secured by Liens on the Hotel Properties that are
the subject of such Asset Sale.
SECTION 6.07. Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
that as long as no Default or Event of Default shall have
78
occurred and be continuing, the Borrower or any Subsidiary may (a) consummate
the Distribution or (b) engage in any of the foregoing transactions (i) in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties or (ii) between or among the
Borrower and its wholly owned Subsidiaries.
SECTION 6.08. Business of Borrower and Subsidiaries. Engage at any
time in any business or business activity other than the business currently
conducted by it or related or collateral activities in the hospitality, travel
or franchise-related industries.
SECTION 6.09. Subsidiary Indebtedness. Permit any Subsidiary to
create, incur, assume or permit to exist any Indebtedness except:
(i) any Indebtedness permitted by Section 6.01;
(ii) Indebtedness of any SPC in the form of collateralized
mortgage obligations or obligations under a real estate investment
trust; provided, however, that, in respect of such Indebtedness, (i)
neither the Borrower nor any other Subsidiary (x) provides credit
support (including any undertaking, agreement or instrument which would
constitute Indebtedness) or has given or made other assurances
regarding repayment, (y) is directly or indirectly personally liable or
(z) is the lender and (ii) the obligees will have recourse solely
against the assets of SPC for repayment of the principal of and
interest on such Indebtedness and any fees, indemnities, expense
reimbursements or other amounts of whatever nature accrued or payable
in connection with such Indebtedness; and provided further, that, so
long as the Manor Care Note remains in effect or any principal,
interest or any other expenses or amounts payable thereunder shall be
unpaid, the proceeds of the incurrence of such Indebtedness shall be
applied solely to prepay amounts outstanding under the Manor Care Note;
and
(iii) other Indebtedness of any Subsidiary; provided, however,
that the aggregate principal amount (the "Subsidiary Debt Amount")
outstanding of all such other Indebtedness of all Subsidiaries
(excluding
79
amounts permitted under clause (i) above) may not exceed 15% of
Consolidated Total Assets at such time; provided further, however,
that, at any time during which the Manor Care Note remains in effect or
any principal, interest or any other expenses or amounts payable
thereunder shall be unpaid, the Subsidiary Debt Amount may not exceed
5% of Consolidated Total Assets at such time.
SECTION 6.10. Agreements. Permit any Subsidiary to enter into any
agreement or incur any obligation the terms of which would impair the ability of
any Subsidiary to pay dividends, to make intercompany loans or advances or to
make distributions (it being agreed that this Section shall not be breached by
any such agreement or obligation binding upon a Subsidiary at the time it
becomes a Subsidiary and not incurred in contemplation of its becoming a
Subsidiary).
SECTION 6.11. Fiscal Year and Accounting Practices. Change its fiscal
year end or accounting practices from those in effect at May 31, 1996, other
than as required by GAAP.
SECTION 6.12. No Further Negative Pledges. Except with respect to
prohibitions against other encumbrances on specific property encumbered to
secure payment of particular Indebtedness (which Indebtedness relates solely to
such specific property, and improvements and accretions thereto, and is
otherwise permitted hereby), enter into any agreement prohibiting the creation
or assumption of any Lien upon the properties or assets of the Borrower or any
Subsidiary, whether now owned or hereafter acquired, or requiring an obligation
to be secured if some other obligation is secured.
SECTION 6.13. Minimum Consolidated Net Worth. In the case of the
Borrower, permit its Consolidated Net Worth at any time to be less than the
greater of (i) the sum of (x) $75,000,000, (y) 50% of the Borrower's
Consolidated Net Income accrued during the period (treated as one accounting
period) commencing on the date of the Distribution and ending on the last day of
the most recent fiscal quarter for which financial statements have been
delivered pursuant to Section 5.04 (which amount shall not include Consolidated
Net Income for any fiscal quarter in which the Borrower's Consolidated Net
Income is negative) and (z) the aggregate net cash proceeds received by the
Borrower from the issuance or sale of its capital stock since the date hereof,
and (ii)
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the sum of (W) the amount that is equal to 75% of the Borrower's Consolidated
Net Worth as of the last day of the month in which the Distribution occurs plus
(X) 50% of the Borrower's Consolidated Net Income accrued during the period
(treated as one accounting period) commencing on the date on which the
Distribution occurs, and ending on the last day of the most recent fiscal
quarter for which financial statements have been delivered pursuant to Section
5.04 (which amount shall not include Consolidated Net Income for any fiscal
quarter in which the Borrower's Consolidated Net Income is negative), plus (Y)
the aggregate net cash proceeds received by the Borrower from the issuance or
sale of its capital stock since the date hereof, minus (Z) an amount equal to
the decrease, if any, in the Borrower's Consolidated Net Worth (as measured at
the date of the Distribution) resulting from the sale, transfer or other
disposition of Hotel Properties or an SPC.
SECTION 6.14. Consolidated Leverage Ratio. In the case of the
Borrower, permit the Consolidated Leverage Ratio as of the last day of and for
any period of four fiscal quarters ending during the period from and including
the date hereof through the Maturity Date to exceed (i) 3.75 to 1.0, at any time
during which the Manor Care Note remains in effect or any principal, interest or
any other expenses or amounts payable thereunder shall be unpaid, and (ii) 3.25
to 1.0, at any other time. The Consolidated Leverage Ratio shall be calculated
as of the end of each fiscal quarter based on the period of the four consecutive
fiscal quarters ending on such date.
SECTION 6.15. Consolidated Interest Coverage Ratio. In the case of the
Borrower, permit its Consolidated Interest Coverage Ratio at any time during the
period from and including the date hereof through the Maturity Date to be less
than (i) 3.25 to 1.0, at any time during which the Manor Care Note remains in
effect or any principal, interest or any other expenses or amounts payable
thereunder shall be unpaid, and (ii) 3.75 to 1.0, at any other time. The
Consolidated Interest Coverage Ratio shall be calculated as of the end of each
fiscal quarter based on the period of the four consecutive fiscal quarters
ending on such date.
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ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made (such
representation or warranty being deemed made as provided in Section
2.20(b) and Section 4.01) in or in connection with any Loan Document or
the borrowings or issuances of Letter of Credit hereunder, or any
representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made,
deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to any L/C Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or L/C Disbursement or any other amount (other than
an amount referred to in clause (b) above) due under any Loan Document,
when and as the same shall become due and payable, and such default
shall continue unremedied for a period of five Business Days;
(d) default shall be made in the due observance or
performance by the Borrower of any covenant, condition
or agreement contained in Section 5.01(a) or 5.05 or in
Article VI;
(e) default shall be made in the due observance or performance
by the Borrower of any covenant, condition or agreement contained in
any Loan Document (other than those specified in clauses (b), (c) and
(d) above) and such default shall continue unremedied for a period of
five Business Days after notice thereof from the Agent or any Lender to
the Borrower;
(f) the Borrower or any Subsidiary shall (i) fail
to pay any principal or interest, regardless of amount,
due in respect of any Indebtedness in an aggregate
82
principal amount in excess of $10,000,000, when and as the same shall
become due and payable, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any Indebtedness in an aggregate
principal amount in excess of $10,000,000 if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a trustee on its or their behalf (with
or without the giving of notice, the lapse of time or both) to cause,
such Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Subsidiary, or of a substantial part of the property or assets of the
Borrower or a Subsidiary, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of the property or assets of the Borrower or a
Subsidiary or (iii) the winding-up or liquidation of the Borrower or
any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
(h) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
the filing of any petition described in clause (g) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of the property or assets of the
Borrower or any Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become
83
unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 60 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties
of the Borrower or any Subsidiary to enforce any such judgment;
(j) a Reportable Event or Reportable Events, or a failure to
make a required installment or other payment (within the meaning of
Section 412(n)(l) of the Code), shall have occurred with respect to any
Plan or Plans that reasonably could be expected to result in liability
of the Borrower to the PBGC or to a Plan in an aggregate amount
exceeding $5,000,000 and, within 30 days after the reporting of any
such Reportable Event to the Agent or after the receipt by the Agent of
the statement required pursuant to Section 5.06, the Agent shall have
notified the Borrower in writing that (i) the Required Lenders have
made a determination that, on the basis of such Reportable Event or
Reportable Events or the failure to make a required payment, there are
reasonable grounds (A) for the termination of such Plan or Plans by the
PBGC, (B) for the appointment by the appropriate United States District
Court of a trustee to administer such Plan or Plans or (C) for the
imposition of a lien in favor of a Plan and (ii) as a result thereof an
Event of Default exists hereunder; or a trustee shall be appointed by a
United States District Court to administer any such Plan or Plans; or
the PBGC shall institute proceedings to terminate any Plan or Plans;
(k) (i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or
such ERISA Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner and (iii) the amount of
the
84
Withdrawal Liability specified in such notice, when aggregated with all
other amounts required to be paid to Multiemployer Plans in connection
with Withdrawal Liabilities (determined as of the date or dates of such
notification), exceeds $5,000,000 or requires payments exceeding
$1,000,000 in any year;
(l) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if solely as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been or will
be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an
amount exceeding $1,000,000; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) above), and at any time thereafter during the
continuance of such event, the Agent, at the request of the Required Lenders,
shall, by notice to the Borrower, take any or all of the following actions, at
the same or different times: (i) terminate forthwith the Commitments or L/C
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding and (iii) require cash
collateral as contemplated by Section 2.20(j); and in any event with respect to
the Borrower described in clause (g) or (h) above, the Commitments and L/C
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, and the Borrower
shall automatically be
85
required to provide cash collateral in respect of outstanding Letters of Credit,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
ARTICLE VIII. THE AGENT
In order to expedite the transactions contemplated by this Agreement,
The Chase Manhattan Bank is hereby appointed to act as Agent on behalf of the
Lenders and the Issuing Bank. Each of the Lenders hereby irrevocably authorizes
the Agent to take such actions on behalf of such Lender or Issuing Bank and to
exercise such powers as are specifically delegated to the Agent by the terms and
provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Agent is hereby expressly authorized by the Lenders and
the Issuing Bank, without hereby limiting any implied authority, (a) to receive
on behalf of the Lenders and the Issuing Bank all payments of principal of and
interest on the Loans, all payments in respect of L/C Disbursements and all
other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender or Issuing Bank its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the Borrower of any Event of Default
specified in this Agreement of which the Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered
pursuant to this Agreement as received by the Agent.
Neither the Agent nor any of its directors, officers, employees or
agents shall be liable to the Lenders as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith (other than any
statement, representation or warranty relating to the Agent or relating to the
functions of the Agent hereunder), or be required to ascertain or to make any
inquiry concerning the performance or observance by the Borrower of any of the
terms, conditions, covenants or agreements contained in any Loan Document. The
Agent shall not be responsible to the Lenders for the due execution,
genuineness, validity, enforceability or effectiveness of
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this Agreement or any other Loan Documents or other instruments or agreements.
The Agent may deem and treat the payee of any note referred to in Section 2.07
as the owner thereof for all purposes hereof until it shall have received from
the payee of such note notice, given as provided herein, of the transfer
thereof. The Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inac- tion pursuant thereto shall be binding on
all the Lenders. The Agent shall, in the absence of knowledge to the contrary,
be entitled to rely on any instrument or document believed by it in good faith
to be genuine and correct and to have been signed or sent by the proper person
or persons. Neither the Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrower on account of the failure
of or delay in performance or breach by any Lender or Issuing Bank of any of its
obligations hereunder or to any Lender or Issuing Bank on account of the failure
of or delay in performance or breach by any other Lender or Issuing Bank or the
Borrower of any of their respective obligations hereunder or under any other
Loan Document or in connection herewith or therewith. The Agent may execute any
and all duties hereunder by or through agents or employees and shall be entitled
to rely upon the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor subject to the written consent of the Borrower to
such successor (which consent will not be unreasonably withheld). If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent
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which shall be a bank with offices in New York, New York and London, England,
having a combined capital and surplus of at least $500,000,000 or an Affiliate
of any such bank. Upon the acceptance of any appointment as Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. After the
Agent's resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, the Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not the Agent, and
the Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Agent.
Each Lender agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder or, if the
Commitments shall have been terminated, on its Commitment most recently in
effect) of any expenses incurred for the benefit of the Lenders by the Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which the Borrower shall be
obligated to reimburse under Section 9.05 but which shall not have been
reimbursed by the Borrower and (ii) to indemnify and hold harmless the Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against it in its capacity as the Agent or any of
them in any way relating to or arising out of the Agent's role under this
Agreement or any other Loan Document or any action taken or omitted by it or any
of them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Borrower; provided, however, that no
Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
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misconduct of the Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
The Co-Agent shall not have any responsibilities or obligations as
Co-Agent under any of the Loan Documents.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telex, graphic scanning or other telegraphic
communications equipment of the sending party, as follows:
(a) if to the Borrower, at 00000 Xxxxxxxx Xxxx, Xxxxxx Xxxxxx,
XX 00000, Attention of General Counsel, with a copy to the Chief
Financial Officer of the Borrower (Telecopy No. 301-979-4007);
(b) if to the Agent, to it at The Chase Manhattan
Bank, Agent Bank Services Group, Grand Central Tower,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000. Attention of
Xxxxx Xxxxxx, (Telecopy No. (000) 000-0000), with a
copy to The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of [Xxxxx X. Xxx, III],
(Telecopy No. 212-270-3279) and Chase Manhattan
International Limited, Trinity Tower, 9 Xxxxxx Xxxx
Street, London, England E19YT, Attention of Xxxxxx
Xxxxxxx (Telecopy No. 011 44 71 777 2360); and
(c) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender became a party hereto.
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Except as otherwise provided in Section 9.15(c), all notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt, in
each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have received copies hereof which, when taken together, bear the
signatures of each Lender, and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Agent and each Lender and their respective
successors and assigns, except that the Borrower may not assign or delegate its
rights or obligations hereunder or any interest herein without the prior consent
of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, the Agent, the Issuing Bank or
the Lenders that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and
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obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided, however, that (i) except in
the case of an assignment to a Lender or an Affiliate of such Lender, the
Borrower and the Agent (and, in the case of any assignment of a Commitment, the
Issuing Bank) must give their prior written consent to such assignment (which
consent shall not be unreasonably withheld), (ii) the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Agent) shall not be less than $5,000,000 and the amount of the Commitment
of such Lender remaining after such assignment shall not be less than $5,000,000
or shall be zero, (iii) the parties to each such assignment shall execute and
deliver to the Agent an Assignment and Acceptance, together with a processing
and recordation fee of $2,000 and (iv) the assignee, if it shall not be a
Lender, shall deliver to the Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to Section 9.04(e), from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto (but shall continue to be entitled to the benefits of Sections
2.13, 2.15, 2.19 and 10.05, as well as to any Fees accrued for its account
hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such
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assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive in the absence of manifest error and the Borrower, the
Agent, the Issuing Bank and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
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(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in Section 9.04(b) and, if required, the written consent of the Borrower, the
Issuing Bank and the Agent to such assignment, the Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Lenders and the Issuing
Bank.
(f) Each Lender may without the consent of the Borrower, the Issuing
Bank or the Agent sell participations to one or more banks or other entities in
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it); provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participating banks or
other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.13, 2.15 and 2.19 to the same extent as if
they were Lenders but not in excess of those cost protections to which the
Lender from which it purchased its participation would be entitled to under
Sections 2.13, 2.15 and 2.19 and (iv) the Borrower, the Agent, the Issuing Bank
and the other Lenders shall continue to deal solely and directly with such
Lender (and shall not be required to deal with any participating bank or other
entity, notwithstanding any other provision contained herein) in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder, increasing the Commitment of such
Lender or decreasing the amount of principal of or the rate at which interest is
payable on the Loans, or extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment
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or participation pursuant to this Section 9.04, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided,
however, that, prior to any such disclosure of information designated by the
Borrower as confidential, each such assignee or participant or proposed assignee
or participant shall execute an agreement whereby such assignee or participant
shall agree to preserve the confidentiality of such confidential information
(subject to those exceptions set forth in Section 9.17). It is understood that
confidential information relating to the Borrower would not ordinarily be
provided in connection with assignments or participations of Competitive Loans.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided, however, that no such
assignment shall release a Lender from any of its obligations hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by each of the Agent and the Issuing
Bank and its Affiliates in connection with the preparation of this Agreement and
the other Loan Documents and the syndication of the facilities provided for
herein or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Agent or any Lender in
connection with the enforcement or protection of their rights (as such rights
may relate to the Borrower or any Subsidiary) in connection with this Agreement
and the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder and under the Issuing Bank Agreements, as applicable,
including the reasonable fees and disbursements of Cravath, Swaine & Xxxxx,
counsel for the Agent, any other counsel for the Agent and counsel for any
Lender, including the allocated costs of in-house counsel.
(b) The Borrower agrees to indemnify the Agent, each Lender, and the
Issuing Bank, and their respective directors, officers, employees, agents and
Affiliates (each such person being called an "Indemnitee") against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees and expenses, incurred
by or
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asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other Loan
Document or any agreement or instrument contemplated thereby, the performance by
the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit, or (iii) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not any Indem- xxxxx is a party thereto;
provided, however, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the negligence or misconduct of
such Indemnitee. Promptly after receipt by an Indemnitee of notice of any
complaint or the commencement of any action or proceeding with respect to which
indemnification is being sought hereunder, such person shall notify the Borrower
of such complaint or of the commencement of such action or proceeding, but
failure so to notify the Borrower will relieve the Borrower from any liability
which such Borrower may have hereunder only if, and to the extent that such
failure results in the forfeiture by such Borrower of substantial rights and
defenses, and shall not in any event relieve such Borrower from any other
obligation or liability that such Borrower may have to any Indemnitee otherwise
than under this Agreement. If the Borrower so elects or is requested by such
Indemnitee, such Borrower shall assume the defense of such action or proceeding,
including the employment of counsel reasonably satisfactory to the Indemnitee
and the payment of the reasonable fees and disbursements of such counsel. In the
event, however, such Indemnitee reasonably determines in its judgment that
having common counsel would present such counsel with a conflict of interest or
if the defendant in, or targets of, any such action or proceeding include both
the Indemnitee and such Borrower, and such Indemnitee reasonably concludes that
there may be legal defenses available to it or other Indemnitees that are
different from or in addition to those available to such Borrower or if such
Borrower fails to assume the defense of the action or proceeding or to employ
counsel reasonably satisfactory to such Indemnitee, in either case in a timely
manner, then the Indemnitee may employ separate counsel to represent or defend
it in any such action or proceeding and such Borrower shall pay the reasonable
fees and disbursements of such counsel. In any action or proceeding
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the defense of which the Borrower assumes, the Indemnitee shall have the right
to participate in such litigation and to retain its own counsel at the
Indemnitee's own expense. The Borrower further agrees that it shall not, without
the prior written consent of the Indemnitee, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not an Indemnitee is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes (i) an
unconditional release of each Indemnitee hereunder from all liability arising
out of such claim, action, suit or proceeding or (ii) a covenant not to xxx each
Indemnitee, or another similar alternative which is consented to by each
Indemnitee party to such claim, action, suit or proceeding, which covenant not
to xxx or other approved alternative has the effect of an unconditional release
of each Indemnitee hereunder from all liability arising out of such claim,
action, suit or proceeding.
(c) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Agent or any Lender
or any Issuing Bank. All amounts due under this Section shall be payable on
written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
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SECTION 9.07. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICTS OF LAWS PRINCIPLES OR PROVISIONS. EACH LETTER OF
CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS
OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the Agent
or any Lender or any Issuing Bank in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agent,
the Issuing Bank and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by Section 9.08(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on the Borrower in any case
shall entitle such Borrower to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or Fees, or waive or excuse any such payment or any part thereof, or decrease
the rate of interest on any Loan or L/C Disbursement, without the prior written
consent of each Lender affected thereby, (ii) increase the Commitment or change
the Facility Fees of any Lender without the prior written consent of such
Lender, or (iii) amend or modify the
97
provisions of Section 2.16, the provisions of this Section, the definition of
the "Required Lenders" or the provisions of Section 9.03, without the prior
written consent of each affected Lender; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agent or any
Issuing Bank hereunder without the prior written consent of the Agent or such
Issuing Bank.
(c) Notwithstanding the foregoing, any Issuing Bank Agreement may be
waived, amended or modified by the parties thereto with the written approval of
the Agent if and to the extent that such waiver, amendment or modification would
be permitted in connection with the execution and delivery of a replacement of
such agreement.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the applicable interest rate on any Loan
or participation in any L/C Disbursement, together with all fees and charges
which are treated as interest or such Loan or participation in any L/C
Disbursement under applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any Lender, shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by such Lender in accordance with
applicable law, together with all Charges payable to such Lender, shall be
limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the other Loan
Documents and the letter agreement referred to in Section 2.06(b) constitute the
entire contract between the parties relative to the subject matter hereof. Any
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents. Nothing in this
Agreement or in the other Loan Documents, expressed or implied, is intended to
confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.
SECTION 9.11. Waiver of Jury Trial; Punitive Damages. Each party
hereto hereby waives, to the fullest extent permitted by applicable law, (a) any
right it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of, under or in connection with
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this Agreement or any of the other Loan Documents and (b) any claims for
punitive damages (to the extent such claims arise from the use of proceeds of
the Loans for the purpose of acquisitions). Each party hereto (i) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement and
the other Loan Documents, as applicable, by, among other things, the mutual
waivers and certifications in this Section.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process; Judgment
Currency. (a) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or
99
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Agent, any Issuing Bank, or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against the Borrower or its properties in the courts of any
jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) The Borrower and each other party hereto consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
(d) If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one currency into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so
under applicable law, that the rate of exchange used shall be the spot rate at
which in accordance with normal banking procedures the first currency could be
purchased in New York City with such other currency by the person obtaining such
judgment on the Business Day preceding that on which final judgment is given.
(e) The parties agree, to the fullest extent that they may effectively
do so under applicable law, that the obligations of the Borrower to make
payments in any currency of the principal of and interest on the Loans of such
Borrower and any other amounts due from such Borrower hereunder to the Agent as
provided in Section 2.16 (i) shall not be discharged or satisfied by any tender,
or any recovery pursuant to any judgment (whether or not entered in
100
accordance with Section 9.15(d)), in any currency other than the relevant
currency, except to the extent that such tender or recovery shall result in the
actual receipt by the Agent at its relevant office as provided in Section 2.16
on behalf of the Lenders of the full amount of the relevant currency expressed
to be payable in respect of the principal of and interest on the Loans and all
other amounts due hereunder (it being assumed for purposes of this clause (i)
that the Agent will convert any amount tendered or recovered into the relevant
currency on the date of such tender or recovery), (ii) shall be enforceable as
an alternative or additional cause of action for the purpose of recovering in
the relevant currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the relevant currency so expressed to be
payable and (iii) shall not be affected by an unrelated judgment being obtained
for any other sum due under this Agreement.
SECTION 9.16. Confidentiality. Unless otherwise agreed to in writing
by the Borrower, the Issuing Bank, the Agent and each Lender hereby agree to
keep all Proprietary Information (as defined below) confidential and not to
disclose or reveal any Proprietary Information to any person other than the
Agent's or such Lender's directors, officers, employees, Affiliates and agents
and to actual or potential assignees and participants, and then only on a
confidential basis; provided, however, that the Agent, the Issuing Bank or any
Lender may disclose Proprietary Information (a) as required by law, rule,
regulation or judicial process, (b) to its attorneys and accountants, (c) as
requested or required by any state or Federal or foreign authority or examiner
regulating banks or banking or (d) subject to appropriate confidentiality
protections, in any legal proceedings between the Agent, the Issuing Bank or
such Lender and the Borrower arising out of this Agreement. For purposes of this
Agreement, the term "Proprietary Information" shall include all information
about the Borrower or any of their Affiliates which has been furnished by the
Borrower or any of its Affiliates, whether furnished before or after the date
hereof, and regardless of the manner in which it is furnished; provided,
however, that Proprietary Information does not include information which (x) is
or becomes generally available to the public other than as a result of a
disclosure by the Agent, the Issuing Bank or any Lender not permitted by this
Agreement, (y) was obtained or otherwise became available to the Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure to
the Agent, the Issuing Bank or such
101
Lender by the Borrower or any of its Affiliates or (z) becomes available to the
Agent, the Issuing Bank or any Lender on a nonconfidential basis from a person
other than the Borrower or its Affiliates who, to the best knowledge of the
Agent, the Issuing Bank or such Lender, as the case may be, is not otherwise
bound by a confidentiality agreement with the Borrower or any of its Affiliates,
or is not
otherwise prohibited from transmitting the information to the Agent, the Issuing
Bank or such Lender.
IN WITNESS WHEREOF, the Borrower, the Agent, the Issuing Bank and the
Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
CHOICE HOTELS HOLDINGS, INC., as a
Borrower,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, individually
and as Issuing Bank and Agent,
by
---------------------------------
Name:
Title:
NATIONSBANK,
by
---------------------------------
Name:
Title:
FIRST NATIONAL BANK OF MARYLAND,
by
------------------------------
Name:
Title:
SANWA BANK,
by
-------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES,
by
-----------------------------
Name:
Title:
CRESTAR BANK,
by
----------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
------------------------------
Name:
Title:
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, Choice Hotels International, Inc. (the "Borrower"),
refers to the Competitive Advance and Multi-Currency Revolving Credit Facility
Agreement dated as of October 30, 1996, among Choice Hotels Holdings, Inc.
(subsequently renamed Choice Hotels International Inc.), the lenders listed in
Schedule 2.01 thereto, Nationsbank, N.A., as co-agent, and The Chase Manhattan
Bank, as agent for the lenders (the "Credit Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The Borrower hereby gives you notice pursuant to
Section 2.03(a) of the Credit Agreement that it requests a Competitive Borrowing
under the Credit Agreement, and in that connection sets forth below the terms on
which such Competitive Borrowing is requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) ______________________
(B) Principal Amount of
Competitive Borrowing(1) ______________________
(C) Interest rate basis(2) ______________________
--------
1 In Dollars not less than $5,000,000 (and in integral multiples of
$1,000,000) or greater than the Total Commitment then available.
2 Eurodollar Loan or Fixed Rate Loan.
2
(D) Interest Period and the last
day thereof(3) ______________________
Upon acceptance of any or all of the Loans offered by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the Credit Agreement have been satisfied.
Very truly yours,
by
-------------------------------
Title: [Responsible Officer]
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
--------
3 Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
EXHIBIT A-2
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Bank]
[Address]
New York, NY
Attention:
[Date]
Dear Sirs:
Reference is made to the Competitive Advance and Multi-Currency
Revolving Credit Facility Agreement dated as of October 30, 1996, among Choice
Hotels Holdings, Inc., a Delaware corporation (the "Borrower"), the lenders
listed in Schedule 2.01 thereto, Nationsbank, N.A., as co-agent, and The Chase
Manhattan Bank, as agent for the lenders (the "Credit Agreement"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Borrower made a Competitive
Bid Request on , 19 , pursuant to Section 2.03(a) of the Credit Agreement, and
in that connection you are invited to submit a Competitive Bid by
[Date]/[Time].4 Your Competitive Bid must comply with Section 2.03(b) of the
Credit Agreement and the terms set forth below on which the Competitive Bid
Request was made:
(A) Date of Competitive Borrowing ____________________
(B) Principal amount of
Competitive Borrowing ____________________
(C) Interest rate basis ____________________
--------
4 The Competitive Bid must be received by the Agent (i) in the case of
Eurodollar Loans, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case
of Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the
Business Day of a proposed Competitive Borrowing.
2
(D) Interest Period and the
last day thereof ____________________
Very truly yours,
THE CHASE MANHATTAN BANK,
as Agent,
by
---------------------------
Title:
EXHIBIT A-3
FORM OF COMPETITIVE BID
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, [Name of Bank], refers to the Competitive Advance and
Multi-Currency Revolving Credit Facility Agreement dated as of October 30, 1996,
among Choice Hotels Holdings, Inc., a Delaware corporation (the "Borrower"), the
lenders listed in Schedule 2.01 thereto, Nationsbank, N.A., as co-agent, and The
Chase Manhattan Bank, as agent for the lenders (the "Credit Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The undersigned hereby
makes a Competitive Bid pursuant to Section 2.03(b) of the Credit Agreement, in
response to the Competitive Bid Request made by the Borrower on , 19 , and in
that connection sets forth below the terms on which such Competitive Bid is
made:
(A) Principal Amount5 ____________________
(B) Competitive Bid Rate6 ____________________
(C) Interest Period and last
day thereof ____________________
--------
5 In Dollars not less than $5,000,000 or greater than the requested
Competitive Borrowing and in integral multiples of $1,000,000. Multiple
bids will be accepted by the Agent. 6I.e., LIBO Rate + or - %, in the case
of Eurodollar Loans or %, in the case of Fixed Rate Loans.
2
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Credit Agreement, to extend credit to the Borrower
upon acceptance by the Borrower of this bid in accordance with Section 2.03(d)
of the Credit Agreement.
Very truly yours,
[NAME OF LENDER,]
by
-----------------------
Title:
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, Choice Hotels International, Inc. (the "Borrower"),
refers to the Competitive Advance and Multi-Currency Revolving Credit Facility
Agreement dated as of October 30, 1996, among Choice Hotels Holdings, Inc. (as
subsequently renamed Choice Hotels International, Inc.), a Delaware corporation
(the "Borrower"), the lenders listed in Schedule 2.01 thereto, Nationsbank,
N.A., as co-agent, and The Chase Manhattan Bank, as agent for the lenders (the
"Credit Agreement").
In accordance with Section 2.03(c) of the Credit Agreement, we have
received a summary of bids in connection with our Competitive Bid Request dated
and in accordance with Section 2.03(d) of the Credit Agreement, we hereby accept
the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
$ [%]/[+/-. %]
$
2
The $ should be deposited in The Chase Manhattan Bank account number [
] on [date].
Very truly yours,
CHOICE HOTELS INTERNATIONAL,
INC.
by
------------------------
Name:
Title:
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
EXHIBIT A-5
FORM OF STANDBY BORROWING REQUEST
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, Choice Hotels International, Inc. (the "Borrower"),
refers to the Competitive Advance and Multi-Currency Revolving Credit Facility
Agreement dated as of October 30, 1996, among Choice Hotels Holdings, Inc.
(subsequently renamed Choice Hotels International, Inc.), a Delaware corporation
(the "Borrower"), the lenders listed in Schedule 2.01 thereto, Nationsbank,
N.A., as co-agent, and The Chase Manhattan Bank, as agent for the lenders (the
"Credit Agreement"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Borrower hereby gives you notice pursuant to Section 2.04 of the Credit
Agreement that it requests a Standby Borrowing under the Credit Agreement, and
in that connection sets forth below the terms on which such Standby Borrowing is
requested to be made:
(A) Date of Standby Borrowing
(which is a Business Day) ____________________
(B) Principal Amount of
Standby Borrowing(7) ____________________
(C) Interest rate basis(8) ____________________
--------
7 Not less than $5,000,000 (and in integral multiples of $1,000,000) or
greater than the Total Commitment then available. For Eurocurrency
Borrowings, express in Equivalent Dollar Amount.
8 Eurocurrency Loan, Eurodollar Loan, CD Loan or ABR Loan.
2
(D) Interest Period and the last
day thereof(9) ____________________
(E) For Eurocurrency Borrowings:
(1) Type of Alternative Currency
(2) Funds are requested to be
disbursed to the following:
Bank Name:
Bank Address:
For Credit to:
Account Name:
Account Number:
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the Credit Agreement have been satisfied.
Very truly yours,
by
--------------------------------
Title: [Responsible Officer]
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
--------
9 Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
MANOR CARE, INC.
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via FAX to the
attention of Xxxxxxxxx Xxxx at The Chase Manhattan Bank as soon as possible.
Fax Number: 000-000-0000
LEGAL NAME TO APPEAR IN DOCUMENTATION:
-----------------------------------------------------------------------------
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name:
-----------------------------------------------------
Street Address:
-----------------------------------------------------
City, State, Zip Code:
-----------------------------------------------------
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
-----------------------------------------------------
Street Address:
-----------------------------------------------------
City, State, Zip Code:
-----------------------------------------------------
CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary Contact:
-----------------------------------------------------
2
Street Address:
-----------------------------------------------------
City, State, Zip Code:
-----------------------------------------------------
Phone Number:
-----------------------------------------------------
FAX Number:
-----------------------------------------------------
Backup Contact:
-----------------------------------------------------
Street Address:
-----------------------------------------------------
City, State, Zip Code:
-----------------------------------------------------
Phone Number:
-----------------------------------------------------
FAX Number:
-----------------------------------------------------
TAX WITHHOLDING:
Non Resident Alien _____________________Y* _____________________N
*Form 4224 Enclosed
Tax ID Number _____________________________________________________
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
-----------------------------------------------------
Street Address:
-----------------------------------------------------
City, State, Zip Code:
-----------------------------------------------------
3
Phone Number:
----------------------------------------------------------
FAX Number:
----------------------------------------------------------
BID LOAN NOTIFICATION:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
----------------------------------------------------------
Street Address:
----------------------------------------------------------
City, State, Zip Code:
----------------------------------------------------------
Phone Number:
----------------------------------------------------------
FAX Number:
----------------------------------------------------------
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
----------------------------------------------------------------------------
Routing Transit/ABA number of Bank where funds are to be transferred:
----------------------------------------------------------------------------
Name of Account, if applicable:
----------------------------------------------------------------------------
Account Number:
-----------------------------------------------------------------
Additional Information:_____________________________________________________
MAILINGS:
Please specify who should receive financial information:
4
Name:
------------------------------------------------------------
Street Address:
------------------------------------------------------------
City, State, Zip Code:
------------------------------------------------------------
It is very important that all of the above information is accurately filled in
and returned promptly. If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a copy of the questionnaire. If you have any questions, please
call me on 000-000-0000.
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Competitive Advance and Multi-Currency
Revolving Credit Facility Agreement dated as of October 30, 1996, among Choice
Hotels Holdings, Inc., a Delaware corporation (the "Borrower"), the lenders
listed in Schedule 2.01, Nationsbank, N.A., as co-agent, and The Chase Manhattan
Bank, a New York banking corporation, as agent for the Lenders (the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned Interest")
in the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Effective Date and the Competitive Loans and
Standby Loans owing to the Assignor which are outstanding on the Effective Date.
Each of the Assignor and the Assignee hereby makes and agrees to be bound by all
the representations, warranties and agreements set forth in Section 9.04(c) of
the Credit Agreement, a copy of which has been received by each such party. From
and after the Effective Date (i) the Assignee shall be a party to and be bound
by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
2. This Assignment and Acceptance is being delivered to the Agent
together with (i) if the Assignee is organized under the laws of a jurisdiction
outside the United States, the forms specified in Section 2.19(f) of the Credit
Agreement, duly completed and executed by such Assignee, (ii) if the Assignee is
not already a Lender under the Credit Agreement, an Administrative Questionnaire
in the form of Exhibit B to the Credit Agreement and (iv) a processing and
recordation fee of $2,000.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York without reference to its
conflicts of laws principles or provisions.
2
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment (may not be fewer than 5 Business Days after the
Date of Assignment):
Facility
Principal Amount Assigned Percentage Assigned of Facility and Commitment
Thereunder (as set forth, to at least 8 decimals, as a percentage of the
Facility and the aggregate Commitments of all Lenders thereunder)
ABR Loans:
CD Loans:
Eurocurrency Loans:
Eurodollar Competitive
Loans:
Eurodollar Standby Loans:
Fixed Rate Competitive
Loans:
The terms set forth above and on
the reverse side hereof are hereby
agreed to: Accepted:
, as Assignor THE CHASE MANHATTAN BANK, as agent
----------------------------
By: By:
---------------------------- -----------------------------
Name: Name:
Title: Title:
, as Assignee [Name of Borrower]
----------------------------
By: By:
---------------------------- -----------------------------
Name: Name:
Title: Title:
EXHIBIT D
FORM OF OPINION
OF [ ], ESQ.
GENERAL COUNSEL FOR THE BORROWER
1. The Borrower (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Effect, and (d) has the power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and to borrow under the Loan Documents.
2. The execution, delivery and performance by the Borrower of each of
the Loan Documents and the borrowings under the Loan Documents by the Borrower
(collectively, the "Transactions") (a) have been duly authorized by all
requisite action, including, if required, stockholder action on the part of the
Borrower and (b) will not (i) violate (A) to my best knowledge after due
inquiry, any provision of law, statute, rule or regulation, (B) any provision of
the certificate or articles of incorporation or other constitutive documents or
by-laws of the Borrower, (C) to my best knowledge after due inquiry, any order
of any Governmental Authority or (D) to my best knowledge after due inquiry, any
provision of any indenture, agreement or other instrument to which the Borrower
is a party or by which any of them or any of their property is or may be bound,
(ii) to my best knowledge after due inquiry, be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (iii) result
in the creation or imposition of any Lien upon or with respect to any property
or assets now owned or hereafter acquired by the Borrower.
3. The Credit Agreement has been duly executed and delivered by the
Borrower and constitutes, and each of the other Loan Documents when executed and
delivered by the Borrower will constitute, a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms.
2
4. No action, consent or approval of, registration or filing with or
any other action by any Governmental Authority is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect.
5. (a) There are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
business, property or rights of any such person (i) which involve any Loan
Document or the Transactions (excluding any such actions, suits or proceedings
threatened by the Lenders or the Agent) or (ii) as to which there is a
reasonable probability of any adverse determination and which, if such probable
adverse determination occurred, could reasonably be anticipated to result in a
Material Adverse Effect.
(b) The Borrower is not in violation of any law, rule or regulation, or
in default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
anticipated to result in a Material Adverse Effect.
6. The Borrower is not (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
EXHIBIT E
[FORM OF ISSUING BANK AGREEMENT]
ISSUING BANK AGREEMENT dated as of [ ] between CHOICE HOTELS
HOLDINGS, INC., a Delaware corporation (the "Borrower"), and the
financial institution identified on Schedule I hereto as the Issuing
Bank (the "Issuing Bank").
Reference is made to the Competitive Advance and Multi-Currency
Revolving Credit Facility Agreement dated as of October 30, 1996 (as amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrower, the Lenders named therein and The Chase Manhattan Bank, as Agent.
The Borrower and the Issuing Bank desire to enter into this Agreement in order
to provide for Letters of Credit to be issued by the Issuing Bank as
contemplated by the Credit Agreement. Accordingly, the parties hereto agree as
follows:
SECTION 1. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings specified in the
Credit Agreement. The provisions of Section 1.02 of the Credit Agreement shall
apply to this Agreement as though set forth herein.
SECTION 2. Letter of Credit Commitment. The Issuing Bank hereby agrees
to be an "Issuing Bank" under, and, subject to the terms and conditions hereof
and of the Credit Agreement, to issue Letters of Credit under, the Credit
Agreement; provided, however, that Letters of Credit issued by the Issuing Bank
hereunder shall be subject to the limitations, if any, set forth on Schedule I
hereto, in addition to the limitations set forth in the Credit Agreement.
SECTION 3. Issuance Procedure. In order to request the issuance of a
Letter of Credit hereunder, the Borrower shall hand deliver or telecopy a notice
(specifying the information required by Section 2.20(b) of the Credit Agreement)
to the Issuing Bank, as its address or telecopy number specified on Schedule I
hereto (or such other address or telecopy number as the Issuing Bank may specify
by notice to the Borrower), not later than the time of day (local time at such
address) specified on Schedule I hereto prior to the proposed date of issuance
of such Letter of Credit. A copy of such notice shall be sent, concurrently, by
the Borrower
2
to the Agent in the manner specified for borrowing requests under the Credit
Agreement. Upon receipt of such notice, the Issuing Bank shall consult the Agent
by telephone in order to determine (i) whether the conditions specified in the
last sentence of Section 2.20(b) of the Credit Agreement will be satisfied in
connection with the issuance of such Letter of Credit and (ii) whether the
requested expiration date for such Letter of Credit complies with Section
2.20(c) of the Credit Agreement.
SECTION 4. Issuing Bank Fees, Interest and Payments. The Issuing Bank
Fees payable to the Issuing Bank in respect of Letters of Credit issued
hereunder are specified on Schedule I hereto (and such fees shall be in addition
to the Issuing Bank's customary documentary and processing charges in connection
with the issuance, amendment or transfer of any Letter of Credit issued
hereunder). Each payment of Issuing Bank Fees payable hereunder shall be made
not later than 12:00 (noon), local time at the place of payment, on the date
when due, in immediately available funds, to the account of the Issuing Bank
specified on Schedule I hereto or to such other Lender specified on Schedule I
hereto (or to such other account of the Issuing Bank as it may specify by notice
to the Borrower).
SECTION 5. Credit Agreement Terms. Notwithstanding any provision hereof
which may be construed to the contrary, it is expressly understood and agreed
that (a) this Agreement is supplemental to the Credit Agreement and is intended
to constitute an Issuing Bank Agreement, as defined therein (and, as such,
constitutes an integral part of the Credit Agreement as though the terms of this
Agreement were set forth in the Credit Agreement), (b) each Letter of Credit
issued hereunder and each and L/C Disbursement made under any such Letter of
Credit shall constitute a "Letter of Credit" and an "L/C Disbursement",
respectively, for all purposes of the Credit Agreement, (c) the Issuing Bank's
commitment to issue Letters of Credit hereunder, and each and every Letter of
Credit requested or issued hereunder, shall in each case be subject to the terms
and conditions and entitled to the benefits of the Credit Agreement and (d) the
terms and conditions of the Credit Agreement are hereby incorporated herein as
though set forth herein in full and shall supersede any contrary provisions
hereof.
SECTION 6. Assignment. The Issuing Bank may not
assign its commitment to issue Letters of Credit hereunder
without the consent of the Borrower and prior notice to the
3
Agent. In the event of an assignment by the Issuing Bank of all its other
interests, rights and obligations under the Credit Agreement, then the Issuing
Bank's commitment to issue Letters of Credit hereunder shall terminate unless
the Issuing Bank, the Borrower and the Agent otherwise agree.
SECTION 7. Effectiveness. This Agreement shall not be
effective until counterparts hereof executed on behalf of
each of the Borrower and the Issuing Bank have been
delivered to and accepted by the Agent.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
CHOICE HOTELS HOLDINGS, INC.,
by
---------------------
Name:
Title:
[ISSUING BANK],
by
--------------------
Name:
Title:
Accepted:
THE CHASE MANHATTAN BANK, as Agent,
by
---------------------
Name:
Title:
Schedule I to the
Issuing Bank Agreement
Issuing Bank:
Letters of Credit:
Issuing Bank's Address
and Telecopy Number for
Notice:
Time of Day by which
Notices must be received: A notice requesting the issuance of a Letter of Credit
must be received by the Issuing Bank by 11:00 a.m. not less than three Business
Days prior to the proposed date of issuance.
Issuing Bank Fees: [ ]% per annum on the average daily undrawn amount of each
Letter of Credit issued hereunder, payable on the dates that L/C Participation
Fees are payable pursuant to Section 2.06 of the Credit Agreement.
Issuing Bank's Account
for Payment of Issuing
Bank Fees:
SCHEDULE 2.01
------------------------------------------------------------------------------
Contact Person
and Telephone
Name and Address of Lender and Telecopy Numbers Commitment
------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK Xxxxxxx X. Xxxxxxxx $20,000,000
000 Xxxx Xxxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
------------------------------------------------------------------------------
NATIONSBANK Xxxxxxx X. Xxxxxxx $18,000,000
0000 Xxxxxxxxx Xxxxx, 0xx Xxxxx Tel: 000-000-0000
Xxxxxxxx, XX 00000-0000 Fax: 000-000-0000
------------------------------------------------------------------------------
CRESTAR BANK Xxxx Xxxxxxxx $14,000,000
0000 Xxx Xxxx Xxxxxx, XX Tel: 000-000-0000
Xxxxxxxxxx, XX 00000 Fax: 000-000-0000
------------------------------------------------------------------------------
THE BANK OF NOVA SCOTIA Xxxxx Xxxxxxx $14,000,000
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
------------------------------------------------------------------------------
THE SANWA BANK LIMITED Xxxxxxx Xxxxxxxx $14,000,000
Park Avenue Plaza Tel: 000-000-0000
00 Xxxx 00xx Xxxxxx Fax: 000-000-0000
Xxx Xxxx, XX 00000
------------------------------------------------------------------------------
DEUTSCHE BANK A.G. Xxxx X. Xxxxxxx $10,000,000
00 Xxxx 00xx Xxxxxx Tel: 000-000-0000
Xxx Xxxx, XX 00000 Fax: 000-000-0000
------------------------------------------------------------------------------
FIRST NATIONAL BANK OF Xxxxxxx Xxxxxx $10,000,000
MARYLAND Tel: 000-000-0000
00 Xxxxx Xxxxxxx Xxxxxx, Fax: 000-000-0000
Banc 101-570
Xxxxxxxxx, XX 00000
==============================================================================
TABLE OF CONTENTS
ARTICLE I
Definitions
Page
SECTION 1.01. Defined Terms......................................... 1
SECTION 1.02. Terms Generally....................................... 24
ARTICLE II
The Credits
SECTION 2.01. Commitments........................................... 25
SECTION 2.02. Loans................................................. 26
SECTION 2.03. Competitive Bid Procedure............................. 29
SECTION 2.04. Standby Borrowing Procedure........................... 32
SECTION 2.05. Refinancings.......................................... 33
SECTION 2.06. Fees.................................................. 34
SECTION 2.07. Evidence of Indebtedness;
Repayment of Loans................................ 35
SECTION 2.08. Interest on Loans..................................... 36
SECTION 2.09. Default Interest...................................... 37
SECTION 2.10. Alternate Rate of Interest............................ 37
SECTION 2.11. Termination and Reduction of
Commitments....................................... 38
SECTION 2.12. Prepayment............................................ 39
SECTION 2.13. Reserve Requirements;
Change in Circumstances........................... 40
SECTION 2.14. Change in Legality.................................... 42
SECTION 2.15. Indemnity............................................. 43
SECTION 2.16. Pro Rata Treatment.................................... 44
SECTION 2.17. Sharing of Setoffs.................................... 45
SECTION 2.18. Payments.............................................. 46
SECTION 2.19. Taxes................................................. 46
SECTION 2.20. Letters of Credit..................................... 50
SECTION 2.21. Extension of Maturity Date............................ 56
ARTICLE III
Representations And Warranties
SECTION 3.01. Organization; Powers.................................. 57
SECTION 3.02. Authorization......................................... 57
SECTION 3.03. Enforceability........................................ 57
SECTION 3.04. Governmental Approvals................................ 58
i
SECTION 3.05. Financial Statements.................................. 58
SECTION 3.06. No Material Adverse Change............................ 58
SECTION 3.07. Title to Properties; .................................
Possession Under Leases............................... 58
SECTION 3.08. Subsidiaries.......................................... 59
SECTION 3.09. Litigation; Compliance with Laws...................... 59
SECTION 3.10. Agreements............................................ 59
SECTION 3.11. Federal Reserve Regulations........................... 60
SECTION 3.12. Investment Borrower Act;
Public Utility Holding Borrower Act............... 60
SECTION 3.13. Use of Proceeds....................................... 60
SECTION 3.14. Tax Returns........................................... 60
SECTION 3.15. No Material Misstatements............................. 61
SECTION 3.16. Employee Benefit Plans................................ 61
SECTION 3.17. Environmental Matters................................. 61
SECTION 3.18. Solvency.............................................. 62
SECTION 3.19. Distribution.......................................... 62
ARTICLE IV
Conditions Of Lending
SECTION 4.01. All Credit Events..................................... 63
SECTION 4.02. First Credit Event.................................... 64
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties.................. 66
SECTION 5.02. Insurance............................................. 66
SECTION 5.03. Obligations and Taxes................................. 66
SECTION 5.04. Financial Statements, Reports, etc. .................. 67
SECTION 5.05. Litigation and Other Notices.......................... 68
SECTION 5.06. ERISA................................................. 69
SECTION 5.07. Maintaining Records;
Access to Properties
and Inspections................................... 69
SECTION 5.08. Use of Proceeds....................................... 70
SECTION 5.09. Ownership............................................. 70
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness.......................................... 71
SECTION 6.02. Liens................................................. 73
ii
SECTION 6.03. Sale and Lease-Back Transactions...................... 75
SECTION 6.04. Investments, Loans and Advances....................... 76
SECTION 6.05. Mergers and Consolidations............................ 76
SECTION 6.06. Asset Sales........................................... 77
SECTION 6.07. Transactions with Affiliates.......................... 77
SECTION 6.08. Business of Borrower and Subsidiaries................. 78
SECTION 6.09. Subsidiary Indebtedness............................... 79
SECTION 6.10. Agreements............................................ 79
SECTION 6.11. Fiscal Year Accounting Practices...................... 79
SECTION 6.12. No Further Negative Pledges........................... 79
SECTION 6.11. Minimum Consolidated Net Worth........................ 80
SECTION 6.12. Consolidated Leverage Ratio........................... 80
SECTION 6.13. Consolidated Interest Coverage Ratio.................. 80
ARTICLE VII
Events of Default
ARTICLE VIII
The Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices............................................... 88
SECTION 9.02. Survival of Agreement................................. 89
SECTION 9.03. Binding Effect........................................ 89
SECTION 9.04. Successors and Assigns................................ 89
SECTION 9.05. Expenses; Indemnity................................... 93
SECTION 9.06. Right of Setoff....................................... 95
SECTION 9.07. Applicable Law........................................ 96
SECTION 9.08. Waivers; Amendment.................................... 96
SECTION 9.09. Interest Rate Limitation.............................. 97
SECTION 9.10. Entire Agreement...................................... 97
SECTION 9.11. Waiver of Jury Trial;
Punitive Damages.................................. 97
SECTION 9.12. Severability.......................................... 98
SECTION 9.13. Counterparts.......................................... 98
SECTION 9.14. Headings.............................................. 98
SECTION 9.15. Jurisdiction; Consent to Service
of Process; Judgment Currency..................... 98
SECTION 9.16. Confidentiality....................................... 100
iii
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid
Accept/Reject Letter
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Form of Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Opinion of Counsel
Exhibit E Form of Issuing Bank Agreement
Schedule 1.01 Hotel Properties
Schedule 2.01 Commitments
Schedule 3.07 Leased Hotel Properties
Schedule 3.08 Subsidiaries
Schedule 6.01(a Indebtedness
Schedule 6.01(h) Insurance Related Letters of Credit
Promissory Notes Associated with Insurance
Programs
Schedule 6.01(I) Existing Bonds
Schedule 6.02 Liens
Schedule 6.02(j) Permitted Mortgages
Schedule 6.04 Permitted Investments
iv
